The Gazette’s parent, Freedom Communications, is expected to exit from bankruptcy within six weeks. Under the company’s plan for reorganization, secured creditors led by JPMorgan Chase & Co. will own all of the company’s equity.
That won’t last. The banks must, by law, divest themselves of their interests in the company within five years. In practice, they’ll probably move a lot faster.
As a company, Freedom, like Topsy, “jest grew.” It owns dozens of far-flung, diverse, and unrelated media properties. The company owns a bunch of little papers in a remote part of west Texas, ditto in Florida, ditto in South Carolina, a random assortment of TV and radio stations, the Gazette, and a sluggish newspaper in southern California, the Orange County Register.
Of the company’s just-appointed six member all-male board of directors, four are private equity guys. Board chair James Dunning heads the Dunning Group, “a private media group which specializes in media leveraged buyouts.”
Director Ross Levinsohn “is a founding and managing director of Fuse Capital, which invests in digital media and communications.”
Sean Moriarty works at the Mayfield Fund, a Silicon Valley venture capital group. Mitchell Stern is a consultant who worked for Murdoch, and subsequently ran DirecTV.
Aside from interim CEO Burl Osbourne, who took over for Scott Flanders (presently Playboy’s CEO) when Freedom declared bankruptcy, there’s only one newspaper guy on the board-Donald Grenesko, who was CFO of the Tribune company until 2008.
These are guys who know how to buy and sell media properties, not operate them for the long term. There’s a lot of high-level expertise there, and it’s reasonable to expect that the new board will move swiftly to sell off the company, piece by piece.
Why so? Because owning old media nowadays is like owning a pay telephone company 15 years ago. The companies are still throwing off some cash, still have strong market niches, but time is not on their side. It’s best to get rid of Freedom’s unwieldy corporate structure, spin off individual properties to local owners, take the money and run.
Both current Gazette publisher Steve Pope and Independent owner/publisher John Weiss are, according to the usual unreliable sources, trying to put together investor groups to make an offer for the gray lady of Prospect Street.
Will either succeed? Will they team up in a Colorado Springs variant of “The Odd Couple?” Will the Gazette be spun off to another media group, such as Gannett or Media News Group?
Who knows? But one thing is certain-the Gazette will find new owners, and it’s doubtful that the new owners will stick with the paper’s proudly eccentric editorial policy. Unless, of course, our unpredictable new councilman, Sean Paige, can round up some moneyed ideologues to preserve Ayn Rand’s tattered temple.
Otherwise, prepare for the end of days!
R.C. Hoiles? Who’s he? Libertarianism? Did you mean vegetarianism?
Sic transit gloria mundi.