Freedom Communiations May File Bankruptcy

Freedom CommunicationsThe report was in the Wall Street Journal on Sunday, and I forwarded out a Tweet from OCWeekly yesterday evening. Here is the report from today’s Orange County Register.

The Orange County Register’s parent, Freedom Communications, Inc. in Irvine, continues in talks with its lenders about restructuring $770 million in debt, Freedom officials said Sunday.

The Wall Street Journal reported Sunday that Freedom would file Chapter 11 bankruptcy reorganization this week, but Freedom officials would only say that discussions were ongoing.

“We’re working with our lenders,” said Burl Osborne, Freedom’s interim chief executive, who took over the reins of the company after former CEO Scott Flanders left to head Playboy Enterprises Inc. June 30.

In a Chapter 11 bankruptcy, the company’s operations continue while details of the restructuring are worked out under the oversight of the bankruptcy court.

The Register is expected to continue publishing without interruption.

Freedom owns 33 daily newspapers, including the Register, more than 70 weekly newspapers, magazines and other specialty publications and eight television stations.

If Freedom files for bankruptcy, it would be one in a growing list of media companies that have sought relief from debts under bankruptcy protection. Tribune Co., owner of the Los Angeles Times, and the owners of the Philadelphia newspapers are among the media companies that filed Chapter 11 bankruptcy in the last year. Read the complete OCRegister article here.

In an online article in The Money Times described the situation as:

Freedom’s declining revenues
Freedom, which owns 32 dailies and 77 weekly newspapers and eight television stations, has been struggling to cope up with declining advertising revenue and heavy debts.

Over the past five years, the company’s earnings before interest, taxes, depreciation and amortization have declined about 75 percent to about $50 million.

“Freedom has been affected by the same thing that all the media companies have been affected by: the decline of advertising, which has been accelerated by the downturn in the economy,” said, Robert Emmers, a spokesman for Freedom. “Freedom has been working really hard to realign its balance sheet with the reality of the media market today.”

As a cost- cutting measure, Freedom had announced last month that it would cut pay by 5 percent across the board. Further, Register had announced measures like layoffs, salary cuts and unpaid furloughs.

I wonder if the stubborn refusal of Freedom to  allow a change in the “no liberal thought or commentary allowed” policies of their editorial boards has anything to do with the declining revenues for the company?

  10 comments for “Freedom Communiations May File Bankruptcy

  1. Deborah White
    August 31, 2009 at 12:46 pm

    It’s inherently not possible in today’s Orange County to be a widely successful newspaper and offer only one, narrow editorial perspective, whether that perspective be conservative, liberal, libertarian, green or other. When a print newspaper limits its editorial scope to one viewpoint, it necessarily becomes a special interest publication, not aimed at general public interest.

    I find it sad that the OC Register is struggling financially, as it has a rich heritage and talented, hard-working staff.

    But to be successful, the Register must speak to the vast majority of Orange County in 2009, not restrict its core message to one niche group that used to comprise 75% or more of Orange Ccounty’s population. The Register apparently hasn’t taken notice that Orange County almost voted Democratic blue for president in 2008: only 50.9% of Orange County voters cast their ballots for Republican John McCain.

  2. oc'er
    August 31, 2009 at 9:10 pm

    Does that mean the same for the LA Times and their declaration of bankruptcy? I would think a more plausible explanation is the growth of the electronic media (blogs like this one). People are not taking the time to read the papers as done in past generations. Bottom-line, I would not link either to the promotion of a particular philosophy. Just some food for thought…

  3. August 31, 2009 at 9:23 pm

    I will agree that the downfall of print media is not totally linked to the political philosophy of the paper. That said, the failure of the paper to appeal to the broadest spectrum of readers cannot be ignored. The LA Times does at least print commentary from both sides, the Register does not.

  4. oc'er
    September 1, 2009 at 2:28 am

    Check the stats. I believe the Register has a larger circulation daily than the LA Times. If your argument was correct, the situation would be reversed. Print media is on the way out regardless. It has very little to do with philosophy.

  5. Dan Chmielewski
    September 1, 2009 at 9:42 am

    The LA Times has 3.5 to 4 times the circulation of the Register. I believe both papers are actually operational profitable, but they have such massive debt associated with their acquisition and payouts that they cannot make the payments on their debt with the decline in advertising revenue.

    Newspapers do matter; blogs really can’t survive without them because the journalism practiced by newspaper reporters and editorials follows the traditional rules of ethical reporting. Too many blogs — including some here in OC — publish only rumor and supposition which results in a less informed public.

    Where the Register differs from the LA Times and just about any other paper in the country is that the opinion/editorial pages — not the news pages –do not provide a voice for progressives and Democrats in a regular column; only a “Reader Rebuttal.” And even if space is precious in the deadwood edition of the paper, this policy extends to FreedomPolitics.com where there’s no limited newshole to worry about.

    Freedom is not just defined by limited government instrusion in our lives or by how much we pay in taxes.

  6. oc'er
    September 1, 2009 at 6:40 pm

    3.5-4 times the circulation in OC? I find that hard to believe, but have seen stranger things. By the way, I wasn’t arguing the difference in the paper, only suggesting that the philosophical differences are not the reason for the downfall. As for blogs and the internet, I suspect it will take over in the long-term. Your perspective that newspapers matter is a subjective position and not generally the voice of the masses.-

  7. ssaworker
    September 2, 2009 at 12:57 pm

    I am a very vocal opponent of many of the columns and writers in the Register, but I find it somewhat opportunistic and disingenuous to link their editorial philosophy with the financial crunch. As someone else said, the Times is going through a similar hardship, as are most of the papers in the country. The entire print media industry is suffering, because of the economy and the changes in technology.

    I would agree that the Register has gotten stuffy and boring, and needs a real kick in the rear on some issues like bad grammar, poor editing and flat writing. Plus, they need to freshen up things, with some new angles and new writers. But overall, it’s not really fair to hang this on the political view of the paper. It’s much more complex than that.

  8. September 2, 2009 at 1:22 pm

    The trouble facing many newspapers today is not due to the individual profitability of a publication. Rather it is due primarily to leveraged buyouts that saddle the publications with inflated financial debt.

    While the editorial philosphy may contribute to the reader satisfaction, I agree it is not the strongest of the contributing factors.

  9. kramer
    September 2, 2009 at 1:58 pm

    Cmon you liberal idiots. Think, don’t feel. Just about ALL newspapers in the country have declining readership and hence, revenues.

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