Freedom/OCR employees have been warned

[gravehunter]

Emailed to me last night. I figure there are some uneasy feelings in OC today.
The following was sent out to OC Register "associates" on Friday.

Dear Associate:

This notice is being provided to you pursuant to the federal Worker Adjustment and Retraining Notification Act and the California Labor Code Section 1400 et. seq. (together, the “WARN Act”). The information contained in this notice is based on the best information currently available to us.

You are receiving this notice because you are an employee of one of the following entities, all of which are located at 625 N. Grand Ave., Santa Ana, CA 92701 (collectively, “Freedom”):

• Freedom Communications, Inc.;
• Freedom Communications Holdings, Inc.
• OCR Community Publications, Inc.; or
• Freedom Services, Inc.

As background, in connection with Freedom’s bankruptcy proceedings, Freedom’s assets will be sold at an auction. The winner of the auction should be determined by March 21, 2016, and the closing of the asset purchase should occur on March 31, 2016. Thus, your employment with Freedom will terminate on March 31, 2016, absent a change in the auction schedule. The buyer of Freedom’s assets, or an affiliate of the buyer (together, the “Buyer”), may offer you employment (which is Freedom’s desire but beyond its control), or the Buyer may not.

This notice provides you with notice under the WARN Act that you may experience a loss of employment, depending on whether the Buyer offers you employment and maintains your employment. That loss of employment will be experienced on or after March 31, 2016, although the precise date of that loss is uncertain, given the uncertainty of who will acquire Freedom’s assets and the Buyer’s intentions for hiring Freedom’s employees and then maintaining their employment. We would prefer to provide you with more concrete information, but the outcome of the bankruptcy auction is uncertain and depends on factors that are outside of Freedom’s control.

February 12, 2016


Page 2


The termination of your employment for WARN Act purposes may be temporary or permanent and the decision will be made at the Buyer’s discretion. Because of the composition of our employee workforce, there are no bumping rights that exist.

You will continue to be paid your regular rate of pay in accordance with normal payroll cycles until you are terminated from Freedom. The day after you are terminated, your regular pay will cease in accordance with Freedom’s customary practices. All current benefits programs will remain in effect through end of that month.

You may be eligible to receive severance pay upon termination of employment from Freedom. Details of any severance pay will not be available until the bankruptcy judge approves or rejects a proposed severance payment plan that Freedom has submitted to the bankruptcy court.

We anticipate providing further notices to comply with the WARN Act and to keep you informed of the auction status, so that you can plan for a potential loss of employment. In the meantime, nothing in this notice changes the terms of your employment, and if you have questions, please contact ...

 

[HanSenSE]

The major bidders are Digital First, which I'm guessing would make them part of LANG along with the Daily News, Press-Telegram, ect.; and Tribune, which already has the LA , Times and Union-Tribune.

All part of the fallout from Kushner and Spitz's takeover of the Register that sent Freedom into bankruptcy.

 

[LanceyHoward]

The major bidders are Digital First, which I'm guessing would make them part of LANG along with the Daily News, Press-Telegram, ect.; and Tribune, which already has the LA , Times and Union-Tribune.

All part of the fallout from Kushner and Spitz's takeover of the Register that sent Freedom into bankruptcy.

It seems that Tribune and Digital First are now the only two announced bidders.

Tribune Publishing, Digital First Media bid to buy bankrupt O.C. Register

Tribune just sold one/sixth of the company for 44 million in a move many believe is an attempt to come up with enough cash to buy the OCR at the auction.

 

[ChrisLong]

The WARN Act is purely procedural. Teachers get layoff warnings every spring, then when plans are being finalized for next fall, if they have to reduce staff, the notice has already been given. For the workforce at OCR, they will get reamed if the Trib or Digital First get it. They will probably be OK if current CEO Mirman and his $$$ partner, Mike Harrah, get it. Mirman was quoted in his paper that he still will bid during the real auction in March, but they didn't think it was in their best interest to get involved in the stalking horse aspect. Pension money is huge in this whole transaction.

 

[LanceyHoward]

The WARN Act is purely procedural. Teachers get layoff warnings every spring, then when plans are being finalized for next fall, if they have to reduce staff, the notice has already been given. For the workforce at OCR, they will get reamed if the Trib or Digital First get it. They will probably be OK if current CEO Mirman and his $$$ partner, Mike Harrah, get it. Mirman was quoted in his paper that he still will bid during the real auction in March, but they didn't think it was in their best interest to get involved in the stalking horse aspect. Pension money is huge in this whole transaction.

If the Tribune won the bid could they use their existing printing plant, distribution system and editorial staff to produce an Orange County edition of the LA Times (though the masthead would probably still read the Orange County Register)?

The article I read said the Mirman group was worried about getting outbid because the Tribune of Digital First could cut a lot of costs in a merger and use the savings to justify a higher price. I don't think any bidder is goiung near the pension fund liability that I read was about 155 million.

 

[MileHigh]

There are major anti-trust issues with a Tribune purchase at auction, less so with LANG. the pension fund liability is huge.

 

[BTExpress]

There are still anti-trust issues with newspapers? In 2016?

I figured the ultimate argument to the government would be, "Just be happy anyone wants to buy one of these things."

 

[Mr. Editor]

If the Tribune won the bid could they use their existing printing plant, distribution system and editorial staff to produce an Orange County edition of the LA Times (though the masthead would probably still read the Orange County Register)?

The article I read said the Mirman group was worried about getting outbid because the Tribune of Digital First could cut a lot of costs in a merger and use the savings to justify a higher price. I don't think any bidder is goiung near the pension fund liability that I read was about 155 million.

Tribune would be making a mistake to think that Orange County readers want L.A.-centric coverage of sports and that they only need one L.A. Times writer to cover the Angels or other beats. It might save money but it won't add content, readers or clicks.

 

[gravehunter]

Digital First Media makes initial bid of $45 million for OCR/Riverside Press Enterprise

Digital First Media bids $45.5M for Orange County Register, Riverside Press-Enterprise

 

[DanOregon]

"DFM’s bid does not include taking on Freedom’s pension obligations.

“The liabilities were excessive,” Hasse said in an email. “Our understanding is that the pension accountability will be shifted to the (Pension Benefit Guaranty Corp.).”

The PBGC is a government agency that insures private-sector retirement plans and guarantees pension benefits up to $60,136 per year, according to its website."

 

[ChrisLong]

There was a story early last week in which Ken Doctor predicted a total sales price in the $40 million to $65 million range including property. The papers themselves are worth maybe $15 million.

Santa Ana Showdown: Tribune’s Bid for Southern California

I'll repeat a question here that I put elsewhere and nobody commented.
If LANG gets OCR/RPE, which paper becomes the flagship of the chain? (Which BANG paper is the flagship? SJ Merc? Contra Costa?) Usually the papers that "are acquired" become the redheaded stepchild and get stomped on (see Seattle PI taking it in the shorts by the Seattle Times, etc.). For sports, it matters on the downtown beats: Dodgers, Angels, Kings, Ducks, Lakers, Clippers, Bruins, Trojans, and now Rams. Virtually across the board, OCR writers are better the LANG writers (I would estimate that the majority of the LANG staffers have inquired about working at OCR). Wonder how it will shake down.

 

[MileHigh]

LANG *needs* Freedom/OCR/RPE just based on the fact it's already printing several of its publications on Grand. If Tribune gets in there, there's no doubt it will make life difficult from the print standpoint for LANG.

As for flagship? It will still be the LADN, despite the fact clearly there are better beat writers at the OCR. And there will be obvious consolidation in terms of beats, to the point Lean Dean might come out of hiding and flash his infamous smile at how much his plan would be coming to fruition.

But LANG will be running things at OCR, and despite the fact the clear difference in talent level between the two and the fact several LANG refugees have landed on Grand, resumes should have been going out months ago.

 

[LanceyHoward]

There was a story early last week in which Ken Doctor predicted a total sales price in the $40 million to $65 million range including property. The papers themselves are worth maybe $15 million.

Santa Ana Showdown: Tribune’s Bid for Southern California

I'll repeat a question here that I put elsewhere and nobody commented.
If LANG gets OCR/RPE, which paper becomes the flagship of the chain? (Which BANG paper is the flagship? SJ Merc? Contra Costa?) Usually the papers that "are acquired" become the redheaded stepchild and get stomped on (see Seattle PI taking it in the shorts by the Seattle Times, etc.). For sports, it matters on the downtown beats: Dodgers, Angels, Kings, Ducks, Lakers, Clippers, Bruins, Trojans, and now Rams. Virtually across the board, OCR writers are better the LANG writers (I would estimate that the majority of the LANG staffers have inquired about working at OCR). Wonder how it will shake down.

My guess is the Tribune Company will win.

The Tribune strategy has been to buy as many papers as they can in markets where they already dominate (San Diego, Southtown papers in Chicago, etc).

Digital First buys newspapers anywhere and consolidates production at a hub. They seem to be pretty disciplined about what they pay. I also would guess the LANG papers are not doing very given the recent consolidations the company has just initiated in the Bay area. So Digital First may not want to dump a lot of money into SoCal.

So I think Tribune thinks OCR is a paper they have to have. I don't think Digital First thinks that about the OCR.

 

[MileHigh]

Yes, DFM is about consolidation. But as stated above, this is a press issue for LANG. They lose out, they're screwed. Tribune is a hot mess right now, but this would be a major acquisition for it and getting the OCR would give it what the old LAT long sought but never accomplished with the OC edition two decades ago.

 

[Songbird]

 

[gravehunter]

Tribune ownership of OCR could create more problems.....

Antitrust issues raised in newspaper sale

 

[ChrisLong]

Not a done deal, but Trib/LAT has the lead heading down the stretch.

Here are the OCR versions from late last night ...

Local investors walk out as auction for OC Register, Press-Enterprise erupts into all-day battle

... and this morning:

L.A. Times owner wins auction for The Orange County Register, Press-Enterprise at $56 million

Here's the LAObserved entry from Kevin Roderick, who is a former LAT guy but is probably not as well connected there now as he used to be:

Tribune Publishing wins OC Register bidding

 

[steveu]

Commence layoffs in five and space cuts in three, two, one...

 

[ChrisLong]

And the feds step in:

Justice Dept. files lawsuit to block Register sale to Tribune

 

[Songbird]

Feisty!

"The division is living in a time capsule, with a framework that predates the arrival of iPhones, Google, Facebook, and modern media outlets that are killing the traditional newspaper industry," Meyer said. "It wasn’t competition from the L.A. Times that forced the Register into bankruptcy. It was the Internet and related technology."