EXCLUSIVE: Read Aaron Kushner's Secret PowerPoint Pitch to Investors to Save the OC Register

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Will those little cute papers be smiling on Monday?
At the beginning of December 2013, Orange County Register owner Aaron Kushner was seemingly on top of his empire-building game.

Just a year and a half after acquiring Freedom Communications, the Boston businessman had completed the purchase of the Riverside Press-Enterprise, four months after having launched the daily Long Beach Register. Plans were in the works to launch yet another new daily - the Los Angeles Register, which would battle the Los Angeles Times in its own turf. Longtime Freedom community weeklies in Irvine and Newport Beach had been turned into dailies, and staffing at the Reg had ballooned to around 370, near the height of the paper's glory days in the 1990s.

Hiccups had occurred along the way--the P-E's previous owners, the A.H. Belo Corporation, had threatened not to go through with the sale after Kushner couldn't meet certain thresholds, and Freedom's previous owners had sued Kushner over allegations he owed them money. But Kushner was still riding a wave of positive national press for apparently doing the impossible: not only expanding a daily newspaper in a time of endless layoffs and budget cuts, but making it thrive.

Privately, though, Kushner was fretting.

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To complete the P-E deal, he had to take out another loan. His company only had $6 million on hand. Advertising sales were nowhere near the level needed to sustain Kushner's grand experiment, an inconvenient truth he had already shared with his staff in August. To fund his expansionist plans, Kushner was already planning to do the unthinkable: sell off the Register's longtime headquarters, along with the last newspapers of the old R.C. Hoiles chain of libertarian dailies, the Victorville Daily Press and other desert publications.

But first, Kushner needed money.

Gracias, source!
The opening slide of Kushner's PowerPoint presentation

According to sources who spoke to the Weekly on the condition of anonymity, Kushner went around Southern California at the end of 2013 pitching potential funders on a $12 million investment in Freedom. It was needed, according to a confidential PowerPoint presentation obtained by the Weekly, to "complete the $30 million preferred equity financing that surrounded the acquisition of the Press-Enterprise and the recapitalization of the company." Anyone who took the plunge was promised a robust 18 percent annual return, 12 percent equity ownership and "the opportunity to participate in future Freedom transactions" as well as have an "advisory role in the growth of Freedom."

The PowerPoint document (which you can read in its entirety below) is mostly boardroom boosterism: an overview of the company's accomplishments, biographies of its principals, a description of its strategy moving forward, and inspirational "insights" intended to convince potential investors of Freedom's vision.

Investors were unimpressed, sources tell the Weekly.

What's most fascinating about Freedom's PowerPoint presentation is its optimistic description of how Kushner planned to dig himself out of debt even as it showed a dark future ahead. Also notable: his considerable sense of self, even in times of desperation.

"Management believes that the Orange County Register has now built a reservoir of quality and goodwill rivaling any newspaper in the country," the presentation asserted. "The fixed investment in a major revamp of the Register is now complete with the upswing in revenue and major partnerships accumulating already with significant growth still to come."

If that wasn't enough to get the attention of potential investors, there was this: "No other newspaper in the country has yet harnessed the full economic power of Freedom's model."

Kushner's main leverage to ensure the future of his company and convince investors he'd be financially solvent? Real estate.

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Hands off the man, the flim flam man.
His mind is up his sleeve and his talk is make believe.
Oh lord, the man's a fraud, he's flim flam man. He’s so cagey, he’s a flim flam man.

JBinOC topcommenter

"No other newspaper in the country has yet harnessed the full economic power of Freedom's model." 

Maybe that's because they follow the principles of ethical journalism, such as not publishing "sponsored sections" masked as unbiased editorial? 

20ftjesus topcommenter

"...promised a robust 18 percent..."

Junk bonds command 6%; so, what does that say about this offer?

JBinOC topcommenter

Mr. Arellano's reporting and analysis are so excellent, I'm tempted to not append any wry material of my own. 

Oh but fuck that. 
I've exclusively obtained another PowerPoint presentation where Kushner and Spitz say they are going to sell naming rights to Nancy Luna's column.  Carl Jr.'s Fast Food Maven and Fast Food Maven presented by Taco Bell Cantina Bowls are two of the mockups included.

In the slide, Kusnner and Spitz told potential investors that they'll merely be monetizing what Ms. Luna has done for free for years. 


@JBinOC Yeah, that'll work! I'm sure readers will FLOCK to read a review of say, oh, Wahoo's Fish Tacos... SPONSORED by Taco Bell!!! (Where's Triumph the insult comic dog when you need 'em?)

GustavoArellano moderator editortopcommenter

Your sourcing is a million times better than mine, so I defer to your reporting...HA!

20ftjesus topcommenter

@GustavoArellano  Your average Baa or Ba rated preferred stock is yielding 6.1%.  He's offering 3x that.  It sounds scammy.  Also, there's no mention if the shares are noncumulative.  Don't BUY!  

20ftjesus topcommenter

@WideStance  The thing reeks.  You get voting rights but you'll be in the minority; if Kushner stops the dividend, and assuming the shares are perpetual, you lose your twice yearly payment and he never has to pay back your investment.  Sweet deal!

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