Freedom Communications

Origins and growth

In 1919, Ohio newsmen Raymond C. Hoiles and his brother Frank A. Hoiles, who owned The Alliance Review, purchased the Lorain Times-Herald.[3] In 1922, R.C. Hoiles and F.A. Hoiles purchased the Mansfield News.[4] In 1927, R.C. Hoiles acquired the Bucyrus Telegraph-Forum[5] and at some point he sold his stake in the Review back to his elder brother.[6] He also sold the Mansfield News and Lorain Times-Herald in 1930 to Brush-Moore Newspapers.[7]

In March 1935, R.C. Hoiles bought The Orange County Register and moved his base of operations to Santa Ana, California.[8][9] He then acquired the Clovis News-Journal in November 1935.[10] His brother F.A. Hoiles died in a car crash in December 1936.[11] R.C. Hoiles bought The Gazette-Telegraph in January 1946,[12] and Marysville Appeal Democrat in March 1946.[13]

In April 1950, R.C. Hoiles merged his three publishing companies together to form Freedom Newspapers, Inc. The newly formed company published daily newspapers in California, Colorado and Ohio.[14] In October 1951, Freedom acquired three Texas newspapers: The Brownsville Herald, McAllen Valley Evening Monitor, and Harlingen Morning Star. With the sale, the company owned 10 daily newspapers with a total circulation of 135,000.[15] In 1965, Freedom acquired the Turlock Journal.[16]

In 1969, Freedom acquired four Florida papers: Panama City News-Herald, Fort Pierce News-Tribune, Fort Walton Beach Playground Daily News, and the Marianna Floridan.[17] In 1970, Hoiles died at age 90. The Freedom Newspaper chain was then one of the largest in the nation, with a total circulation over 500,000.[18] The company acquired the Porterville Recorder in April 1974,[19] New Bern Sun Journal in May 1974,[20] Victorville Daily Press in January 1978,[21] and Burlington Times-News in July 1978.[22]

Legal battle for company

Following the death of Hoiles, the company was owned by his three children, Clarence H. Hoiles, Harry H. Hoiles and Mary Jane Hoiles Hardie.[23] A bitter feud ensued over the fate of the company, with H.H. Hoiles against his two siblings.[24] Harry Hoiles was named company president following his father's death.[25] He was rebuked in his attempt at becoming Chief executive officer and later claimed his siblings froze him out of company management and stopped him from selling his shares to a third-party.[24] The eldest of the three, Clarence Hoiles, who was instrumental and establishing the company and worked with his father in upper management and eventually became board chairman, died in 1982.[26]

As Freedom Newspapers softened its stance on Libertarianism, Harry Hoiles became disenchanted and attempted to breakup the company. At that time, Freedom was the country's 15th largest chain. It was worth $640 million and owned 31 newspapers with a combined circulation of 800,000.[23] The goal was to form his own company.[24] After the breakup failed, Harry Hoiles attempted to buy the Freedom. One offer was $700 million.[27] Clarence Hoiles's three daughters sued their uncle for mismanaging the trust of their deceased brother.[28] The courts ruled against H.H. Hoiles in 1987 and he eventually resigned from the board of directors.[25] Mary J. Hardie, who served on the company board for many years, died in 1996.[29] Her brother Harry Hoiles died in 1998.[25]

Expansion into TV

Freedom Newspapers expanded into television in 1981 when it purchased KTVL-TV from Sierra Cascade Communication.[30] It then purchased WLNE-TV in 1982 from Pulitzer Broadcasting for $15.5 million,[1] followed by KFDM-TV and WTVC-TV in 1983 from A.H. Belo Corp. for $49 million,[31] and WRGB-TV in 1985 from Universal Communications Corporation.[32] In August 1992, Freedom acquired the Fullerton News Tribune.[33] In 1993, the company was renamed to Freedom Communications.[34] In September 1995, Freedom agreed to purchase WPEC-TV from Photo Electronics Corp.[35] The deal was completed about six months later.[36] In March 1993, Freedom acquired the San Clemente Sun-Post,[37] owned by a subsidiary of Howard Publications.[38] It was then merged into the San Clemente News.[39]

In February 1995, Freedom acquired The Tustin News.[40] In June 1995, Freedom traded the Bucyrus Telegraph-Forum in Ohio and Dothan Progress in Alabama to Thomson Newspapers for the Desert Dispatch and Jacksonville Journal-Courier.[41] In May 1996, Freedom sold the Turlock Journal to Central Valley Publishing, a subsidiary of USMedia Group, Inc.[42] In January 1998, the company acquired WWMT-TV and WLAJ-TV from Granit Broadcasting Co. for $170 million.[43] In 2000, Freedom purchased all the newspapers in Arizona owned by Thomson Newspapers. The sale included the Ahwatukee Foothills News, East Valley Tribune and Yuma Sun.[44]

Sale to private equity

In March 2003, a majority of the Hoiles family voted to sell the company, which at that time included 25 newspapers and eight television stations. Freedom Communications was valued at $2 billion.[45] That October, a majority interest in Freedom Communications was sold to a group of investors led by the Blackstone Group and Providence Equity Partners. Through a stock arrangement, the Hoiles family descendants retained control of the board. The private equity firms received a management fee from the company's gross revenue.[46] The family sold a 40% stake for $470 million, which allowed some members to cash out.[47] As part of this transaction, Freedom had acquired substantial debt.[47]

In 2006, Freedom purchased WCWN from The Tribune Company for $17 million.[48] In spring of 2009, amid the Great Recession, Freedom Communications instituted furloughs for all employees nationwide, followed by a permanent 5% pay cut starting in July 2009.[49] On September 1, 2009, Freedom Communications went into a Chapter 11 bankruptcy reorganization.[50][51] The company left bankruptcy on April 30, 2010, under the ownership of investment firms Alden Global Capital, Angelo, Gordon & Co. and Luxor Capital Group. Lenders to the company also retained a stake in Freedom. Thus, the Hoiles family lost control of the business after sixty years of ownership.[52][53]

On November 2, 2011, Freedom sold its entire television division to Sinclair Broadcast Group for $385 million in a move to eliminate the company's debt. The sale was completed on April 2, 2012.[54] Freedom began selling the majority of its newspaper portfolio in 2012. Four papers in the Midwest were sold to Ohio Community Media, an affiliate of the private equity firm Versa Capital Management, in May.[55] The Clovis News Journal and other newspapers in New Mexico were sold to Stevenson Newspapers.[56] Freedom papers in Texas were sold to AIM Media Texas.[57] Its Florida and North Carolina papers were sold to Halifax Media Group.[58]

2100 Trust

On July 25, 2012, The Orange County Register and six other papers were purchased by 2100 Trust LLC.[59] The papers continued to operate under the Freedom Communications name.[60] The principal company owner was Aaron Kushner, a former greeting-card executive with no prior media experience.[60] Kushner paid $50 million for the assets and agreed to assume the pension liabilities. He soon increased staff, added new sections at the Orange County Register and began a new daily, the Long Beach Register.[61]

In November 2012, Freedom sold the Colorado Springs Gazette to Clarity Media, a subsidiary of The Anschutz Corporation.[62] In April 2013, Freedom sold the Yuma Sun and the Porterville Recorder to Rhode Island Suburban Newspapers.[63][64] In June 2013, Freedom sold the Appeal-Democrat to the Vista, California subsidiary of Horizon Publications.[65][66]

In October 2013, the former owners of Freedom Communications filed a lawsuit against Aaron Kushner demanding his company pay more than $17 million remaining on the sale. Kushner claimed that the prior owners had given him an inaccurate valuation of the assets and he faced $62.3 million in unexpected financial liabilities as a result.[60]

In November 2013, Freedom purchased the Riverside Press-Enterprise from A.H. Belo Corporation for $27 million.[67][68] In January 2014, the company laid off 71 workers in Riverside and Santa Ana.[69] In March 2014, Freedom sold the Daily Press and the Desert Dispatch to New Media Investment Group.[70] In December 2014, the Long Beach Register closed.[71]

On November 1, 2015, Freedom Communications filed for Chapter 11 bankruptcy protection for the second time in its history.[72] In January 2016, Freedom closed several of its weekly papers in Orange County.[73] On March 21, 2016, a bankruptcy judge approved the sale of Freedom Communications and its two major newspapers, the Orange County Register and the Riverside Press-Enterprise, to Digital First Media, the parent of the Los Angeles News Group, which operated eleven daily newspapers in Southern California. After the sale, the subsidiary was renamed to Southern California News Group.[74][75]