A federal bankruptcy court judge approved Digital First Media’s proposed purchase of the Orange County Register as well as the Press-Enterprise based in Riverside. Digital First Media already owns the Los Angeles Daily News and eight other daily newspapers in the Los Angeles area.
Freedom Communications, the owner of the Orange County Register, agreed to sell the two newspapers after another federal judge overruled a higher bid by Tribune Publishing Company, the owner of the Los Angeles Times, citing concerns about competition.
Tribune Publishing Company won a bankruptcy auction for the two newspapers last week with the high bid of $56 million. Just a few hours later, however, the Department of Justice filed an antitrust lawsuit alleging that the deal would grant Tribune a virtual monopoly on print news by owning the four biggest daily newspapers in Southern California. According to the Department of Justice lawsuit, the Los Angeles Times and the Orange County Register together account for 98 percent of all newspaper sales in Orange County and Freedom’s newspapers account for 81 percent of English newspaper sales in Riverside County.
In addition to the Los Angeles Times, Tribune Publishing also owns the San Diego Union-Tribune, the Daily Pilot of Newport Beach, the Huntington Beach Independent, the Burbank Leader and the Glendale News Press. A federal judge issued a restraining order in mid-March to halt Tribune’s acquisition of the Orange County Register and the Press-Enterprise, which paved the way for the success of Digital First Media’s slightly lower bid.
The buyout could not have come at a more opportune time. Freedom Communications filed for Chapter 11 bankruptcy protection in November. Since then, the company has been keeping the Orange County Register and the Press-Enterprise operational with private emergency funding that is set to run out by the end of March. Freedom Communication’s application for bankruptcy protection came after an aggressive campaign of layoffs, buyouts and a bold attempt at expansion and renewal that ultimately failed. Freedom founded new daily papers in Los Angeles and Long Beach and purchased the Press-Enterprise for $27 million. Both of the new papers went bankrupt and had to be shuttered and now Freedom’s remaining holdings, the Orange County Register and the Press-Enterprise, will be sold to pay the company’s creditors, which include the Associated Press.
This latest filing comes seven years after Freedom Communication’s filed for bankruptcy for the first time in 2009. It struggled along after selling several of its newspaper and real estate holdings. The Orange County Register is the company’s flagship newspapers, and its sale to Digital First Media leaves the company’s future very much in doubt.
The buyer, Digital First Media, is the country’s second-largest newspaper company by circulation. The company already owns the Long Beach Press-Telegram, the Los Angeles Daily News and seven other newspapers in Southern California. Digital First’s attorney, Marshall Anstandig, said the company was delighted with the result of the auction.
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(all data current as of 11/20/2017)
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