Feds Sue Over San Diego U-T Parent Company’s Purchase Of SoCal Papers
Thursday, March 17, 2016
Update: 12:20 p.m., March 17, 2016
The Associated Press reports the Justice Department has sued to block the acquisition of two California newspapers, including Orange County Register, by Tribune Publishing Co.
The suit was filed in federal court hours after Tribune, which publishes the Los Angeles Times and San Diego Union-Tribune, announced it had placed a winning $56 million bid for the two newspapers owned by Freedom Communications.
The sale would give Tribune a monopoly over newspaper sales in Orange and Riverside counties and allow it to increase subscription prices and advertising rates, U.S. Justice Department said in a statement.
A federal bankruptcy court judge still must approve the sale and has set a hearing for Monday.
A message seeking comment was left for Tribune.
The sale would string together the biggest newspapers in each of four Southern California counties with a combined population of 18 million, consolidating control over news and advertising in the region.
"Communities benefit by having different groups of editors looking out for them," said Ken Doctor, a media analyst. "When you essentially only have one newsroom leadership deciding what is news for Los Angeles County, Orange County, Riverside County, San Diego County, that is unprecedented."
Tribune announced Thursday that its subsidiary, Orange County Media, LLC, was the successful bidder at a public bankruptcy auction to acquire substantially all of the assets of Freedom Communications Inc., owner of the Orange County Register and the Press- Enterprise in Riverside.
Under the terms of the bid, Chicago-based Tribune Publishing has agreed to pay $56 million in cash for Freedom Communications and its real estate in Santa Ana and Riverside, Tribune said in a statement.
Tribune Publishing's successful bid is subject to Bankruptcy Court approval at a hearing scheduled for March 21, 2016. The transaction is subject to customary closing conditions.
"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," said Tribune Publishing CEO Justin Dearborn.
Tribune also owns the Los Angeles Times and San Diego Union-Tribune. The Register reported earlier this week that the U.S. Justice Department has told Freedom Communications it sees serious antitrust issues with Tribunes bid for the Register and Press-Enterprise, and that it would take action to keep any merger from hurting local newspaper readers and advertisers.
In a letter to Alan Friedman, Freedom's bankruptcy attorney, Justice Department attorneys provided "our current assessment from a competition perspective.
"We wish to inform you that, based on our review to date, the division believes the acquisition of the Freedom assets by Tribune poses a serious risk of harming newspaper readers and advertisers in Orange County and Riverside County," wrote William Baer, assistant attorney general in charge of the antitrust division, according to the Register.
"If Freedom selects Tribune as its purchaser, the division will exercise its antitrust law enforcement responsibilities to ensure that the transaction does not deprive newspaper readers and advertisers in these areas of the benefits of competition."
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