Tribune Publishing wins auction for OC Register parent; Justice Department sues to block sale – Los Angeles Times

7 months ago Comments Off on Tribune Publishing wins auction for OC Register parent; Justice Department sues to block sale – Los Angeles Times

The owner of the Los Angeles Times was selected as the top bidder for the Orange County Register and Riverside Press-Enterprise, but must first overcome serious anti-trust concerns raised by the U.S. Department of Justice.

The $56-million cash purchase of Freedom Communications must be approved at a hearing in bankruptcy court on Monday. The sale would mark a deep expansion in Southern California for Tribune Publishing Co., which last year bought the San Diego Union-Tribune.

The company is looking to extend its reach in Southern California and save money by streamlining some business operations at a time when newspapers struggle to remain profitable.

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“The successful bid for the business of Freedom Communications will allow the Orange County Register and the Press-Enterprise to continue providing a distinct local voice in their communities and deliver premium news and information to consumers across Southern California,” Tribune Publishing Chief Executive Justin Dearborn said in a statement.

But within hours of Dearborn’s announcement, the Department of Justice made good on early warnings that it would intervene if Tribune was named the winner of the auction. It filed a civil lawsuit seeking a temporary restraining order preventing the sale from proceeding.

“If this acquisition is allowed to proceed, newspaper competition will be eliminated and readers and advertisers in Orange and Riverside Counties will suffer,” said Assistant Atty. Gen. Bill Baer of the antitrust division. “Newspapers continue to play an important role in the dissemination of news and information to readers and remain an important vehicle for advertisers.” 

Tribune Publishing spokeswoman Dana Meyer said the company is prepared to defend the legality of the sale.

“The division is living in a time capsule, with a framework that predates the arrival of iPhones, Google, Facebook, and modern media outlets that are killing the traditional newspaper industry,” Meyer said. “It wasn’t competition from the L.A. Times that forced the Register into bankruptcy. It was the Internet and related technology.”

Daniel Lazaroff, professor emeritus at Loyola Law School, said the Justice Department’s argument is harder to make today than decades ago because consumers and advertisers have more choices, including websites and cable news stations.

“If this was 25, 30 years ago, the anti-competitive potential would be much greater,” he said. 

Tribune Publishing beat out two other bidders vying for Freedom, including Digital First Media, a national newspaper chain whose holdings include the Los Angeles Daily News and eight other Southern California newspapers.

An insider group, which includes Freedom co-owner and Chief Executive Rich Mirman and Orange County developer Mike Harrah, withdrew from the process Wednesday evening after hours of negotiations and just before the auction’s official start.

The group complained about the fairness of the process, including how its bid was valued, according to an email from the group’s attorney obtained by The Times.

The attorney, Leonard Shulman, said the group is considering whether to protest the auction.

“We are going to evaluate all our options,” he said.

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Tribune Publishing wins auction for OC Register parent; Justice Department sues to block sale – Los Angeles Times