The U.S. Justice Department didn't wait for Wednesday's planned auction to raise serious doubts about Tribune Publishing's bid to acquire the Orange County Register and other assets of bankrupt Freedom Communications. Tribune's ownership of the Register and the Press-Enterprise in Riverside, when it already owns the Los Angeles Times and the San Diego Union-Tribune, "poses a serious risk of harming newspaper readers and advertisers in Orange County and Riverside County," the head of the Justice Department's antitrust division said in a letter to Freedom.
From the LA Times story:
The letter adds a potential complication to the auction, which was shaping up to be a battle among three companies with strong local interests: Digital First Media, which owns the Los Angeles Daily News and several papers in the South Bay and San Gabriel Valley; Tribune Publishing, which also owns the San Diego Union-Tribune; and a group of Freedom insiders backed by Orange County real estate developer Mike Harrah.
Antitrust authorities said they do not have the same concerns with the other two bidders.
If it won the bidding, Tribune Publishing could face a protracted battle to secure the Justice Department's consent to the acquisition.
Some anti-trust objection to the LA Times' parent company controlling all of the big newspapers from Los Angeles to the Mexican border was expected. I don't know that anyone expected it to come as a pre-emptive strike. Bankruptcy Court Judge Mark S. Wallace has called a March 21 hearing in Santa Ana to approve the sale.
Here is how the Register covers today's news.
“We wish to inform you that, based on our review to date, the division believes the acquisition of the Freedom assets by Tribune poses a serious risk of harming newspaper readers and advertisers in Orange County and Riverside County,” wrote William Baer, assistant attorney general in charge of the antitrust division.
“If Freedom selects Tribune as its purchaser, the division will exercise its antitrust law enforcement responsibilities to ensure that the transaction does not deprive newspaper readers and advertisers in these areas of the benefits of competition.”...
Tribune officials declined to comment Tuesday on the antitrust letter. But Tribune attorneys filed a motion in bankruptcy court challenging Digital First’s designation as the stalking horse bidder and asking the court to eliminate $1.3 million in stalking-horse benefits for Digital First should that company not win the bidding.
Ron Hasse, president of Digital First’s Los Angeles Newspaper Group, said he is keenly aware of the competitive problems that a Tribune-Freedom merger could create for his company’s business. Not only would there be tough competition for readers and advertisers, Freedom prints six of Digital First’s nine Southern California newspapers.