Business

Judge approves sale of 2 Southern California newspapers

A federal bankruptcy judge approved Digital First Media’s $52 million purchase of the Orange County Register and another Southern California newspaper on 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 another judge blocked a higher bid by the owner of the Los Angeles Times.

The move gives Denver-based Digital First, which publishes the Los Angeles Daily News, a total of 11 daily newspapers in Southern California and more than a dozen community weeklies in a four county-region also covered by Tribune Publishing Co.’s Los Angeles Times.

“Ultimately, readers and advertisers benefit most when there is competition,” Ron Hasse, publisher of DFM’s newly-named Southern California News Group, said in a statement. “We are dedicated to bringing stability and a renewed sense of purpose to these two great newspapers.”

Tribune bid $56 million for the papers last week at a bankruptcy auction. But the Justice Department filed an antitrust lawsuit saying 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.

In recent years, newspapers have seen revenues dwindle amid rising competition from websites for advertising and readers. Companies such as Tribune and Digital First have sought to save money by consolidating operations such as printing and distribution. The Justice Department position in Freedom’s case — while not fully tested by the courts — raises questions about how much they'll be able to do that, media industry experts said.

“It would seem to signal that after not doing much of anything, antitrust is at least paying attention to these situations,” said Rick Edmonds, media business analyst at the Poynter Institute.

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