It came not with a bang but a whimper. At around noon today, the Orange County Register
officially announced that four score minus five years of ownership by the fracturing Hoiles family is now no more. Parent company Freedom Communications will continue to have a stake in the paper but not with any involvement by the family that started the newspaper chain back in 1935 under the libertarian banner of R.C. Hoiles.
Instead, Freedom, which declared bankruptcy last September, citing a drastic decrease in advertising revenue, has been purchased by a trio of investors, Alden Global Capital, Angelo Gordon & Co., and "a group of investors led by JPMorgan Chase," according to the Register
on the deal, which ran on the newspaper's business blog under the rather anodyne headline, "Freedom Communications Exits Bankruptcy."
As the story by Mary Ann Milbourn makes clear, however, the Register's problems weren't entirely related to a decline in advertising. "Freedom's financial woes date back to 2004 when the company borrowed $1 billion to buy out family members who wanted to cash in their shares and to cover $332 million in existing debt and the deal's transaction costs," Milbourn reported. "The deal in question allowed remaining members of the Hoiles family to remain as owners in partnership with two investment firms, Blackstone Group and Providence Equity Partners."
Those companies, it should be noted, quickly responded to drops in ad sales by laying off growing numbers of employees--or, in Freedom parlance "associates"--while many others took early retirement or generous layoff packages. Meanwhile, despite the hard times and even as Freedom went into bankruptcy last year, the company managed to pay $3.7 million in bonuses
to top executives like CEO Scott Flanders, who fled the paper for Playboy Enterprises last year after taking home $1.1 million in 2009--including a $400,000 bonus just before the Reg
filed for Chapter 11 protection--and publisher Terry Horne, who got about $200,000.
Horne, by the way, says that the new ownership situation at the paper should hardly be cause for concern. "We believe we can now be even more focused on our mission of being the premier information and marketing company for Orange County," he told readers. "I believe the future is very bright for not only the Register but also for Orange County as a whole."