Tribune Co. loses out on California newspaper sale
March 21, 2016
Following interference from the United States Department of Justice, the Tribune Publishing Company has lost its opportunity to corner the Southern California newspaper market. A competing publisher is now set to purchase a Southern California newspaper portfolio. [USA Today]
At a bankruptcy auction, Tribune Publishing was selected as the purchaser of Freedom Communications Inc, which owns the Orange County Register and the Riverside County Press-Enterprise. In the Southern California market, Tribune Publishing owns the Los Angeles Times and the San Diego Union-Tribune.
On Thursday, the DOJ filed a civil antitrust lawsuit in federal court in attempt to stop Tribune Publishing from purchasing Freedom Communications. The DOJ’s complaint said the Tribune would monopolize newspapers in Orange and Riverside counties if it were to acquire the Register and Press-Enterprise.
Digital First Media, a Denver-based company that owns the Los Angeles Daily News, the Long Beach Press-Telegram and a cluster of Bay Area newspapers, was the second highest bidder at the bankruptcy auction. After the DOJ filed the antitrust suit, Freedom Communications announced it would sell to Digital First Media.
Freedom Communications cited regulatory hurdles facing Tribune Publishing as the reason it would not sell to the higher bidder. The bankrupt publisher was under pressure to complete the sale quickly because its financing is scheduled to end on March 31.
Tribune Publishing bid almost $4 million more than Digital First. The Tribune company bid $56 million for Freedom Communications’ assets, and Digital First bid $52.3 million.
Freedom Communications also owns numerous local publications in Orange County, as well as some weekly newspapers in Los Angles and Riverside counties. Digital First’s California portfolio includes the San Jose Mercury News, the Oakland Tribune, the Contra Costa Times and the Santa Cruz Sentinel.
In recent years, publishers have been purchasing clusters of California newspapers with the intent of sharing journalistic and business duties among sister publications located in the same regions. Tribune Publishing had been carving up the Southern California market, while Digital First and the McClatchy Company were clustering papers in the Bay Area and Central Valley respectively.