Digital First Media Will Acquire Freedom Communications' Newspapers

By Staff Writer

Mar 21, 2016 08:40 AM EDT

The second-biggest newspaper chain in United States will acquire two Southern California newspapers: Orange County Register and Riverside Press-Enterprise. The newspapers was previously owned by Freedom Communication which declared bankruptcy last November.

Following the bankcruptcy, the company planned to sell its two Californian newspapers: Orange County Register and Riverside Press-Enterprise. The top two contenders are Tribune Publishing and Digital First Media. Tribune Publishing is the owner of Los Angeles Times and Chicago Times, while Digital First Media is the New York-based media mogul which owned MediaNews Group, Digital First Ventures, and 21st Century Media.

Previously, Tribune Publishing won the bankruptcy auction to acquire Freedom Communications' assets for $56 million, including Orange County Register and Riverside Press-Enterprise. However, Department of Justice filed an antitrust lawsuit to prevent the acquisition, in fear of newspaper monopoly by Tribune Publishing in two California counties.

Department of Justice has concern that by acquiring Freedom Communications, Tribune will have 98% of the newspaper sales in Orange County. While in Riverside County, Los Angeles Times and Riverside Press-Enterprise have made up 81% of the newspaper market.

Judge on Friday has ruled to block Tribune acquisition of Freedom's and issuing a temporary restriction order. As cited by Market Watch, U.S. District Judge André Birotte Jr. said, "Newspapers — indeed, local ones — are important to a healthy democracy. However, this private harm [blocking the Tribune Publishing bid] does not outweigh the public interest in the preservation of competition."

ABC News reported, Judge Birotte in issuing order said that many online websites don't produce original content, but "primarily post links to stories on the websites of other content generators —including local newspapers like the Register or the Press-Enterprise."

As a result, Tribune must leave the table and let the newspapers to be taken by its rival Digital First Media. Currently in California, Digital First Media owns Los Angeles Daily News and the Long Beach-Press-Telegram.

Freedom Communications' lawyer Alan Friedman told USA Today via email that following the temporary restraining order that has been imposed on Tribune,"Freedom cannot afford the risk associated with Tribune being unable to close in a timely manner." Therefore, "Freedom has decided to accept the DFM offer."

Digital First Media was the runner-up in the bankcrupcy auction at the offer of $45.5 million. Previously, Feedom Communications filed for bankruptcy protection in November, after its aggressive expansion to Los Angeles area failed. The publisher must ceased its Los Angeles Register publication in December 2014, followed by a series of layoffs and buyouts.

Digital First Media will be the new owner of Freedom Communication's newspapers. The New York-based publishers will expand its operation in California with the acquisition.

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