On Monday, a federal bankruptcy court approved the sale of the Orange County Register and Riverside Press-Enterprise to Digital First Media, the second-largest newspaper company in the country.
Some employees at the papers have speculated they might be fired and forced to re-apply for their jobs when the change in ownership becomes final on March 31.
According to the Los Angeles Times, the sale to DFM “has unnerved the (OC Register) newsroom. The company, whose controlling owner is New York City hedge fund Alden Global Capital, has a reputation for cutting costs and running a lean operation.”
DFM had just announced plans to cut its newsroom staff in the San Francisco Bay Area News Group by up to 20 percent when it joined in the bidding for Freedom Communication’s flagship newspapers.
In a statement Monday, the company vowed to “restore vitality to these local news readers.” DFM did not make clear how it would accomplish that after years of drastic cost-cutting at its own papers.
As media analyst Ken Doctor puts it, DFM’s owner, Alden Global Capital, has been slowly “destroying the product.” Employees at 13 DFM papers across the country have gone as long as 10 years without a pay increase.
The company says it paid $52.3 million for the Southern California dailies, a price that includes several smaller papers but none of Freedom’s significant pension debt. Freedom auctioned the papers to help pay off creditors as part of its bankruptcy proceedings.
Court documents show DFM originally offered $45.5 million, then in a Sunday filing upped its bid to $51.8 million.
But over the weekend, after the U.S. Department of Justice had announced it would sue winning bidder Tribune Publishing on antitrust allegations, DFM became the new winner with a $52.3 million offer.
Tribune had bid $56 million, but the government expressed concerns that the company, which owns the Los Angeles Times and San Diego Union-Tribune, would effectively have a local news monopoly if it bought the papers.
In a DFM press release, the company said its Los Angeles News Group will now be known as Southern California News Group after OC Register and Riverside Press-Enterprise purchase, “making it the largest news provider in the combined counties of Los Angeles, Orange, Riverside and San Bernardino.”
SCNG’s president and publisher Ron Hasse said, “We are honored to uphold the values of local journalism, and we look forward to working with award-winning news teams who have dedicated their careers to informing the public about the issues that matter most.”
He added, “We are also excited about providing advertisers a broader platform from which to deliver their messages.”