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Lawyer: OC Register, Press-Enterprise Will Be Sold To Digital First Media

Arts writer Richard Chang, center, works on his computer in the newsroom of the Orange County Register in Santa Ana, Dec. 27, 2012.
Associated Press
Arts writer Richard Chang, center, works on his computer in the newsroom of the Orange County Register in Santa Ana, Dec. 27, 2012.

Freedom Communications Inc., owner of the Orange County Register, has decided to sell its flagship publication, along with the Riverside-based Press-Enterprise, to Digital First Media, according to a company attorney.

The decision comes after a federal judge issued a temporary restraining order blocking a planned sale to Tribune Publishing, owner of the Los Angeles Times and The San Diego Union-Tribune, over antitrust concerns.

"It's been very topsy-turvy, but my guess is that it's over, because Tribune, I don't believe, will be able to get the temporary restraining order removed in a timely manner," attorney William Lobel told the Inland Valley Daily Bulletin. "So we have determined, as the sellers, to take the bid of Digital First Media, and we will appear in court Monday to confirm the sale."

The Daily Bulletin is one of nine Southern California newspapers owned by Digital First Media. Others include the Los Angeles Daily News, the Long Beach Press-Telegram, the Torrance Daily Breeze and the Pasadena Star-News.

Lobel later confirmed the decision in an email to City News Service.

Tribune Publishing Co. was the top bidder at a public bankruptcy auction last week to acquire substantially all of the assets of Freedom Communications Inc. Under the terms of the bid, Chicago-based Tribune Publishing agreed to pay $56 million in cash for Freedom Communications and its real estate in Santa Ana and Riverside, according to the company.

However, the U.S. Department of Justice quickly filed a civil antitrust lawsuit seeking to block the acquisition. U.S. District Court Judge Andre Birotte Jr. on Friday issued a temporary restraining order and scheduled a hearing for March 28 to decide whether to block the sale beyond that date on concerns that the sale would harm consumers and advertisers.

Tribune said in a court filing that the restraining order would, in effect, shut it out of the sale because a bid must be approved quickly in U.S. Bankruptcy Court. The publishing company said Freedom Communications will run out of financing March 31.

The next step in the process is a bankruptcy court hearing scheduled for Monday morning.

A spokeswoman for Tribune Publishing said Saturday that the company was reviewing its options in light of the restraining order, and voiced concern Freedom Communications might accept a lower bid from another publishing company.

"The practical effect of the order will be to force Freedom's newspapers into the hands of an alternative bidder that will be less able to reduce costs and achieve efficiencies, with the likely effect that the journalism serving the local communities will be diminished," Tribune spokeswoman Hillary Manning said. "...In light of the court's order, we are now reviewing our options."

Reached later, Manning declined to comment on Freedom's apparent decision to go with another bidder.

The Times reported that Digital First Media's bid is $52.3 million.

According to the government's complaint, filed in Los Angeles federal court, The Times and the Register together account for 98 percent of newspaper sales in Orange County and the Los Angeles Times and Freedom's newspapers together account for 81 percent of English-language newspaper sales in Riverside County.

Tribune's acquisition of its most significant competitor would give it a monopoly over newspaper sales in each county and allow it to increase subscription prices, raise advertising rates and invest less to maintain the quality of its newspapers, according to the federal Department of Justice.

"If this acquisition is allowed to proceed, newspaper competition will be eliminated and readers and advertisers in Orange and Riverside counties will suffer," Assistant Attorney General Bill Baer of the DOJ's antitrust division, said earlier in the week.

"Newspapers continue to play an important role in the dissemination of news and information to readers and remain an important vehicle for advertisers. The antitrust division is committed to ensuring that competition in this important industry is protected."

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