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:
Freedomâ€™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 companyâ€™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 toÂ 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?