Written by The Business Journal Staff
(AP) — A federal bankruptcy judge approved Digital First Media’s $52 million purchase of the Orange County Register and another Southern California newspapers Monday after a whirlwind week in the courts triggered by government concerns of a news monopoly.
Freedom Communications decided over the weekend to sell the Register and Press-Enterprise of Riverside to Digital First after a judge blocked a higher bid by the owner of the Los Angeles Times.
“We are looking forward to operating both of the newspapers,” said Marshall Anstandig, general counsel to Digital First Media, which owns the Los Angeles Daily News and eight other daily papers in the greater Los Angeles area. “We’re delighted with the result.”
Tribune Publishing Co. won a bankruptcy auction for the newspapers last week with a $56 million bid. But hours later, the U.S. Department of Justice filed an antitrust lawsuit saying that if the deal went through, Tribune would have a virtual monopoly by owning the four largest daily newspapers in Southern California.
Tribune, which also owns The San Diego Union-Tribune, argued that government regulators have an “antiquated” understanding of the media market in a digital age.
But a federal judge issued a temporary restraining order late Friday halting the deal.
“The consequence is we were prevented from closing the sale in an expedited manner that would have maximized value for creditors,” Jeremy Rosenthal, a lawyer for Tribune, told reporters.
The sale needed to be approved before private financing that is keeping Freedom’s newspapers afloat dries up on March 31.
Freedom filed for bankruptcy protection in November following a series of layoffs and buyouts. Those came after the company aggressively expanded print journalism by starting daily papers in Los Angeles and Long Beach and buying the Press-Enterprise for $27 million.
William Lobel, an attorney for Freedom, said he was pleased the sale was approved but would have preferred more money. He questioned why the Justice Department waited until the last minute to raise antitrust concerns that now cannot be contested in court.
Assistant Attorney General Bill Baer said in a statement that many people still rely on local newspapers, even as more information is available online.
“Preventing the Los Angeles Times from combining with the Register and the Press-Enterprise will ensure that citizens and advertisers in Southern California continue to benefit from competition and from a diversity of views in their local news coverage,” he said.
Tribune’s bid would have netted an additional $2.6 million for creditors, said Robert Feinstein, an attorney for the committee of unsecured creditors in Freedom’s bankruptcy case.
The Associated Press is among the creditors in Freedom’s bankruptcy proceedings.