The lights will stay on at the Orange County Register, but the staff remains in the dark.

A bankruptcy judge last week approved a $52.3 million sale of Freedom Communications and its major newspapers, the Register and Riverside Press-Enterprise, to Digital First Media, owner of nine daily papers in the greater L.A. area, including the Los Angeles Daily News and Pasadena Star-News.

But in the days after the deal was announced, no representative of Digital First came by to show the flag. The quiet was particularly disconcerting because the Denver-based company has a track record of slashing staff and budgets at its group of 65 newspapers nationwide. Earlier this month, it announced the consolidation of six papers in Northern California into two operations, resulting in a 20 percent cut in staff and the end of the Oakland Tribune.

Still, said one Register staffer who spoke on condition of anonymity, there is a sense that as harsh as life might be under Digital First, the situation could not be worse than it was under the ailing Freedom – and that with the newspaper’s new place as the flagship of the parent company, things might actually improve.

Even as the flagship, however, the former Freedom paper should expect to do more with less. And the same goes for sister publication the Press-Enterprise.

“Digital First is about maximizing profit,” said Ken Doctor, news industry analyst for Harvard University’s Nieman Journalism Lab. “If you look at the company’s history, it has maintained a fairly steady profit by reducing its head count in newsrooms and operations. Undoubtedly, there will be staff cuts.”

Gustavo Arellano, editor of the OC Weekly newspaper, agreed.

Creditors Burned

Digital First Media’s $52.3 million deal to buy the publishing assets of Freedom Communications is the kind of transaction that leaves creditors essentially short-changed.

The sale is set to be finalized by March 31, when a $4.5 million loan from Freedom’s biggest creditor, Silver Point Capital of Greenwich, Conn., comes due.

Digital First’s assets were valued at $59 million, according to court documents. Freedom’s liabilities came to $214 million, largely owed to hundreds of smaller unsecured creditors.

All of the creditors listed in the proceedings with priority unsecured claims, such as City National Bank, which is owed $800,000, will be paid out of a $3.1 million pool that has been set aside.

City National is the largest of more than 155 creditors based in the city of Los Angeles. A bank spokeswoman declined to comment about the nature of the debt as a matter of policy.

The list of creditors is populated by nearly every local city agency as well as former employees and contractors seeking wages or fees ranging from $100 to $60,000.

– Kristin Marguerite Doidge


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