Tribune Publishing wins $56 million auction to acquire OC Register
One of the largest newspapers in California may soon have a new owner.
Tribune Publishing, the newspaper chain whose holdings include the Los Angeles Times and the Chicago Tribune, has agreed to purchase the Orange County Register and its sister newspaper, the Riverside Press-Enterprise, for $56 million. It prevailed in a somewhat fraught three-way bidding contest between Digital First Media, one of the largest national newspaper chains, and a local group led by Rich Mirman, the CEO of OC Register owner Freedom Communications.
If the sale goes through, it would mark an end to more than a half-century of ownership under Freedom Communications and punctuate a rollercoaster saga that began when the company was purchased by greeting card executive Aaron Kushner in 2012 that led to bankruptcy over a three-year span.
And for Tribune Publishing, it would mean further securing its position as the dominant newspaper publisher in Southern California. With the addition of the OC Register to holdings that include the San Diego Union-Tribune and the Los Angeles Times, the Chicago-based company would own the three largest newspapers in the region.
But as of Thursday morning, Tribune Publishing's purchase is not a done deal. The transaction must be greenlit at a Monday bankruptcy court hearing, which the newspaper company says is a matter of routine. However, the U.S. Department of Justice earlier this week warned that a Tribune purchase of the OC Register raises "serious" antitrust issues that would at minimum prompt regulators to take a close and time-consuming look at the deal.
Tribune Publishing is purchasing Freedom's properties for roughly the same price Kushner paid for the company in 2012, although its assets are markedly different today than they were four years ago. When Kushner bought the company for $50 million, the newspaper still owned its headquarters, which it sold in 2014 to developer Michael Harrah for $27 million. But it also hadn't yet purchased the Riverside Press-Enterprise, which it acquired for $27 million in 2013.
By buying the OC Register and the Press-Enterprise, Tribune would deprive Digital First Media of adding to its Los Angeles News Group, which owns a handful of newspapers in Southern California, and prevent Mirman selling the newspapers at a premium, a possibility raised by media analyst Ken Doctor for POLITICO Media.
Tribune's agreement to purchase the OC Register followed a contested bidding process Wednesday that saw creditors demand Mirman's group tack on $5 million to its $45 million bid to waive the right of creditors to sue its primary figures, according to the OC Register. This request was greeted by derision by Mirman attorney Leonard Shulman, who called it "irregular and unreasonable," according to the OC Register. Mirman's group was reportedly considering joining a Tribune Publishing dispute filed to protest the bidding process at a Monday hearing.
The purchase of the OC Register would be the first major acquisition made by Tribune Publishing on the watch of primary stakeholder Michael Ferro and Justin Dearborn, the newly minted CEO he installed. Jack Griffin, the former CEO of the company, brought aboard Ferro in part because his investment provided the necessary capital to float a bid for the OC Register. But in a twist deemed Shakespearean by Doctor, Ferro's rise at Tribune was followed abruptly by Griffin's ouster, although a spokesman for the outgoing CEO described the departure as amiable.
If the deal goes through, it would give Tribune Publishing the ability to consolidate some of its functions in Southern California, thus eliminating some operating costs.