The Joplin Globe, Joplin, MO

Business

June 11, 2012

Orange County Register parent to be sold to private company

SANTA ANA, Calif. — The owner of The Orange County Register announced Monday that it will be acquired by 2100 Trust LLC, a privately held company led by a Massachusetts investor who previously planned to buy The Boston Globe.

Freedom Communications Holdings Inc. of Irvine, Calif., did not disclose terms of the deal, which includes the sale of the six other remaining Freedom dailies and related properties. The deal, which was described as a merger with a subsidiary of 2100 Trust, is expected to close in about 30 days.

“We couldn’t be more pleased with the opportunity to lead the hard-working and talented employees of Freedom Communications in serving these communities,” said Aaron Kushner, 2100 Trust’s chief executive officer in a statement released by the company. “We believe that newspapers are essential to the fabric of our lives and are excited to own and grow these unique institutions.”

For Freedom, the deal caps a two-year effort to sell off the company’s properties after exiting bankruptcy in April 2010. At that time, a group of investors and banks took over the company from the founding Hoiles family, which had owned the Register for 75 years.

The breakup of Freedom began in November, when Freedom announced the sale of its eight television stations to Sinclair Broadcast Group for $385 million.

That sale was followed by the announcement in May and early June of three separate deals for Freedom’s Midwest, Texas and Florida/North Carolina newspapers. Earlier in the year, Freedom sold two smaller papers - The Tribune in Seymour, Ind., and the News Journal in Clovis, N.M. Terms of the newspaper deals were not disclosed.

The purchase of the Register and other Freedom properties will be 2100 Trust’s first successful media deal after two previous attempts failed.

Kushner founded 2100 Trust in 2009 after he left his position as chief executive of Massachusetts-based Marian Heath Greeting Cards. Kushner, who once owned an online company to help people with moving, then organized a group of former media executives and investors to bid on the Globe.

Last year, according to news reports, 2100 Trust planned to offer more than $200 million to buy the Globe and its related properties. The firm’s plan, however, was short-circuited by the Globe’s owner, The New York Times Co., which said the paper was not for sale.

Earlier this year, 2100 Trust appeared poised to buy a controlling interest in MaineToday Media, owner of the Portland Press Herald and several other papers. Among those working with 2100 Trust was Chris Harte, former president of the Press Herald. Harte previously was publisher of the Minneapolis Star-Tribune. He left after the paper’s bankruptcy in 2009.

The firm’s Maine bid, however, got derailed over differences with management and union objections to concessions Kushner wanted in work hours, benefits and job protections. The Maine company’s board ultimately declined the 2100 Trust offer and accepted a cash infusion of $3 million to $4 million by Maine financier Donald Sussman and his Maine Values, LLC.

Today’s announcement is the latest in a major sea change in U.S. newspaper ownership as the industry struggles to adapt to the Internet age following years of plunging ad revenues and declining circulation.

A whole new group of media players has entered the scene, the most notable of which is billionaire Warren Buffett whose company, Berkshire Hathaway, said last month it would pay $142 million for 63 Media General newspapers.

Last week, it was disclosed that Buffett had taken a 3 percent stake in Iowa-based Lee Enterprises, which owns 48 daily papers. Buffett bought his hometown paper, the Omaha World-Herald, last year for $200 million.

Southern California’s media landscape is also being remade. Last year, Douglas F. Manchester, a San Diego developer and hotelier, bought the San Diego Union-Tribune from Platinum Equity, a Beverly Hills private equity firm. Manchester told online website Voice of San Diego he paid more than $110 million for the paper.

Changes may also be in the works at the Los Angeles Times, whose owner, Tribune Co., is going through what is expected to be the final stages of a nearly four-year bankruptcy.

Many experts think the creditors who will take over Tribune Co. after the bankruptcy will sell off its properties, including the Times.

Several Los Angeles billionaire businessmen have expressed interest in the past in buying the Times and returning it to local control. They include Eli Broad, a former homebuilder and insurance magnate who joined with Ron Burkle, head of the private equity firm Yucaipa Companies, in a 2006 effort to buy the Tribune Co. but lost out to Sam Zell. Entertainment entrepreneur David Geffen also expressed interest in the Times.

Last month, Broad renewed speculation about a sale of the Times after he told a Times reporter he would be interested in partnering with some foundations or other wealthy families to buy the paper.

 

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