Freedom Communications to declare bankruptcy
Yes, I’ve heard.
Freedom Communications is expected to file for bankruptcy this week under a plan that will hand the owner of the Orange County Register and 30 other newspapers around the country to its lenders, people briefed on the matter told DealBook.
A filing by Freedom, which could be made as soon as Tuesday, would be the latest by a newspaper publisher as the industry struggles to cope with declining advertising revenue and heavy debt loads. Several big publishers have already declared bankruptcy over the last 12 months, including the Tribune Company and the owner of Philadelphia’s two major papers.
Freedom’s bankruptcy will probably wipe out the 45 percent equity stake held by two big private equity firms, the Blackstone Group and Providence Equity Partners .
That outcome could mirror what is expected in Tribune, whose expected reorganization plan will probably wipe out the equity stake of the billionaire investor Samuel Zell, who took the company private in 2007.
The majority of Freedom is still owned by the Hoiles family, whose patriarch, R. C. Hoiles, founded the company seven decades ago as an outlet for his libertarian philosophy. Freedom took on the investments by Blackstone and Providence nearly six years ago to allow some Hoiles family members to sell their stakes in the company, ending strife within the clan.
No, I don’t know what it’s going to mean. After all, when the Chicago Tribune bought the LA Times, my division at the LA Times Syndicate had a counterpart in Chicago, but we were fewer in number, had more products, more customers, more revenue — and got the axe anyway.
In that same vein, in a newspaper industry that I’ve described before as the dinosaurs arguing about what that meteor that just hit the planet is going to mean for them, the Hesperia Star is a healthy little mammal. Not only are we not losing our collective shirt, we’re growing in revenue. Small newspapers, like the small mammals, are thriving around the country. Unlike, say, coverage of Capitol Hill, there’s just not that many competing sources of news of Main Street.
That said, I felt pretty confident about the prospects of the new media group at the LA Times Syndicate, too, and I ended up being the guy training the folks in Chicago who ultimately closed out our contracts and put bullets in the brains of the products we’d worked so hard to create. So we’ll see.
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So glad to hear that small town newspapers are doing OK. I know the one I left in Bar Harbor, Maine (the Mount Desert Islander) is doing fine. I think people who choose to live in a small town appreciate and have the time to read an actual paper on a park bench in middle of town or at a cozy coffee shop. What else do you think is behind it?
Comment by Kelly — August 31, 2009 @ 14:42
Well, first is the information monopoly. It’s not like you can pick up the LA Times to find out what’s going on in the local school district — and even if they do an article about the schools here, it’s an annual thing, and not the amount or frequency of information you’d require.
Secondly, advertising in a local paper is much cheaper and much more targeted. Why pay to advertise to someone 100 miles away from your pizza place, since they’ll never go there?
It’s certainly possible that eventually both of these advantages will go away, but it’s not on the horizon. Even the allegedly imminent boom of local news bloggers seem to mostly be concentrated in the big urban areas, not in smaller communities. (And if you’re not getting paid for it, most people won’t consistently attend most government meetings, where plenty of news happens.)
Comment by Beau — August 31, 2009 @ 16:00
Will be hoping for the best Beau.
Comment by Nicole Wyatt — August 31, 2009 @ 18:43