Freedom Communications Files For Chapter 11

SAN FRANCISCO — The company that owns The Orange County Register in California and dozens of other newspapers on Tuesday became the latest publisher to seek bankruptcy protection, driven into financial despair by a staggering drop in advertising revenue.

The filing by Freedom Communications Holdings Inc. was part of a prepackaged plan approved by a majority of the company's lenders.

The consensus on the proposed restructuring should minimize the haggling that can bog down bankruptcy proceedings, although the plan is still expected to take at least four months to gain court approval.

"Reaching this agreement with our lenders provides us with an orderly process to realign our balance sheet with the realities of today's media environment," said Burl Osborne, a newspaper industry veteran who became Freedom's chief executive two months ago.

Under the proposed restructuring, Osborne said the family and two investment firms that own Freedom would be left with no more than a 2 percent stake in the company. The rest of the stock would go to a group of 27 lenders owed nearly $771 million. The lenders, led by JPMorgan Chase & Co., would forgive most of that debt in return for control of the company.

JPMorgan also is part of a lending group that gained control of another troubled newspaper publisher, the Journal Register Co., after it emerged from bankruptcy protection last month.

There will be no immediate changes in Freedom's management, although a new CEO and board could be put in place after the company emerges from bankruptcy protection.

Freedom, in a Chapter 11 filing made in U.S. Bankruptcy Court in Wilmington, Del., listed debts of $1.08 billion and assets with a book value of $757 million and "a market value substantially less than that amount."

The terms of the reorganization are a bitter pill for the clan that has controlled Freedom for the past 74 years.

The descendants of Freedom founder R.C. Hoiles launched the bankruptcy case with a 52 percent stake spread across more than 60 family members and trusts. The remaining 48 percent is held by Blackstone Group LP and Providence Equity Partners, which paid about $450 million to buy out some of the family members in 2004.

Freedom's existing shareholders also will get warrants that can be exchanged for another 10 percent of the privately held company's stock, Osborne said, depending on how well the business bounces back during the next five years.

Freedom Chairman Thomas Bassett, part of the family ownership, declined to comment on the bankruptcy filing late Tuesday, saying he and his relatives had decided to leave the talking to the company's management for now.

With most of its debt off the books, Freedom believes it can still thrive. "It is still a good business with a good future," Osborne said in an interview. "We just had too much debt and too little cash flow."

Although the company expects to lose more than $80 million this year because of various one-time accounting costs, Freedom is still generating positive cash-flow from its ongoing operations, Osborne said.

Freedom has been struggling to bring in enough money to repay its debt for the past year, triggering cost-cutting measures that required workers to take unpaid leave and swallow an across-the-board 5 percent cut in wages.

The Irvine, Calif.-based company employs 8,200 people in 15 states, including about 3,200 contractors. No layoffs are envisioned as part of the bankruptcy reorganization, although that could change if the economy remains in a deep funk, Osborne said.

In an attempt to avoid a bankruptcy filing, Freedom negotiated a reprieve from the restrictions governing its loans four months ago. But it still couldn't find relief from a recession that continued to dry the ad sales that generates most of its revenue.

It's a story that has become all too familiar for newspapers as the worst economic downturn since World War II exacerbates the trouble that the industry already was facing as both readers and advertisers increasingly shun print editions for online alternatives.

Freedom is at least the 10th newspaper publisher to file for bankruptcy protection over the past year. The other publishers still in bankruptcy proceedings include the owners of the Los Angeles Times, Chicago Tribune, the Star Tribune of Minneapolis and The Philadelphia Inquirer.

Other newspapers, including the Rocky Mountain News in Denver and The Seattle Post-Intelligencer, have closed their print editions without even trying to work things out in bankruptcy court. The P-I continues as a Web-only publication.

The financial upheaval is turning control of more newspapers over to lenders.

Freedom's roots date back to 1935 when Hoiles, a one-time printer's apprentice, moved from Ohio to Orange County, where he bought what was then known as The Santa Ana Register in 1935. The newspaper, then located in a largely undeveloped suburbs, would become the bully pulpit for Hoiles' libertarian views and religious principles, as well as the foundation of tremendous wealth that has been passed along to his heirs.

As Orange County turned into a large metropolitan area with Disneyland attracting millions of visitors each year, the Hoiles newspaper emerged as one of the biggest dailies in the country.

The Register's success led to an expansion of the company's holdings to include 30 daily newspapers and dozens of weeklies as well as eight television stations in New York, Texas, Florida and three other states. Besides the Orange County Register, Freedom's other newspapers include The Gazette in Colorado Springs, Colo., and the Odessa American in Texas.

The involvement of Freedom's TV stations could drag out the bankruptcy proceedings because the Federal Communications Commission also must approve any ownership change.

Freedom's newspaper circulation has been sinking along with its revenue.

The Register's weekday circulation averaged just under 231,000 in the six-month period ending March 31, a 23 percent drop from four years ago when the number stood at 300,694, according to the Audit Bureau of Circulations.

As part of its turnaround efforts, Freedom brought in a new chief executive, Scott Flanders, in 2006 and ushered in a new chief financial officer three months ago.

Flanders, though, left Freedom Communications in July to become CEO of another troubled publisher, Playboy Enterprises Inc. Osborne was publisher of the Dallas Morning News for more than 20 years and served as chairman of The Associated Press from 2002 to 2007.

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AP Business Writer Andrew Vanacore in New York contributed to this story.


`Wizards of Waverly Place’ Huge Hit For Disney Channel

NEW YORK — An audience that hasn't reached puberty yet made the Disney Channel's "Wizards of Waverly Place" movie one of television's biggest hits last week.

The 11.43 million viewers who watched the film last Friday was second in popularity only to the 11.46 million who watched Tuesday's edition of "America's Got Talent" on NBC, according to Nielsen Media Research. Only once before, when the first "High School Musical" sequel debuted in 2007, has a cable network beaten everything on broadcast.

Of that Disney audience last Friday, 7.1 million were under age 15, Nielsen said.

It was the most-watched program on cable this year.

NBC had a strong week, led by "America's Got Talent," an exhibition football game and a true-crime story about a bridegroom who went missing while on his honeymoon cruise.

For the week, CBS averaged 6.6 million viewers (4.3 rating, 8 share). NBC had 6.4 million (4.1, 7), and won among the 18-to-49-year-old age group it targets. Fox had 4.8 million (2.9, 5), ABC had 3.8 million (2.5, 4), My Network TV had 1.5 million and the CW had 1.3 million (both 0.9, 2), and ION Television had 700,000 (0.5, 1).

Among the Spanish-language networks, Univision led with 3.2 million viewers (1.7 million rating, 3 share), Telemundo had 950,000 and TeleFutura 930,000 (both 0.5, 1), and Azteca had 160,000 (0.1, 0).

NBC's "Nightly News" topped the evening newscasts with an average of 7.9 million viewers (5.3, 11). ABC's "World News" was second with 7.1 million (4.8, 10) and the "CBS Evening News" had 5.4 million viewers (3.7, 8).

A ratings point represents 1,149,000 households, or 1 percent of the nation's estimated 114.9 million TV homes. The share is the percentage of in-use televisions tuned to a given show.

For the week of Aug. 24-30, the top 10 shows, their networks and viewerships: "America's Got Talent" (Tuesday), NBC, 11.46 million; "America's Got Talent" (Wednesday), NBC, 11.19 million; NFL Exhibition Football: Chicago at Denver, NBC, 10.4 million; "NCIS," CBS, 10.06 million; "60 Minutes," CBS, 9.71 million; "Two and a Half Men," CBS, 9.55 million; "The Big Bang Theory," CBS, 8.56 million; "CSI: Crime Scene Investigation," CBS, 8.4 million; "The Mentalist, CBS, 8.07 million; "Big Brother 11" (Thursday), CBS, 7.79 million.

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ABC is owned by The Walt Disney Co. CBS is owned by CBS Corp. CW is a joint venture of Warner Bros. Entertainment and CBS Corp. Fox and My Network TV are units of News Corp. NBC and Telemundo are owned by General Electric Co. ION Television is owned by ION Media Networks. TeleFutura is a division of Univision. Azteca America is a wholly owned subsidiary of TV Azteca S.A. de C.V.

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On the Net:

http://www.nielsenmedia.com


Shelly Palmer: Gmail Goes Down, Twitter Freaks Out: MediaBytes with Shelly Palmer September 2, 2009

Google's GMail service went down for a few hours yesterday. The service error sent many into a panic, as millions of people rely heavily on Gmail in order to conduct business. The outage, which last for a good portion of the afternoon, had Twitter in an uproar, with Gmail making the trending topics list, giving some reason to believe that a massive Gmail outage could cripple the vulnerable Twitter infrastructure.


While the NFL noted that in-game tweeting would be outlawed this year, the league has now announced a new rule that would make tweeting from a game not only illegal for players, but also for the media. The new rule specifies that "forms of accounts of the game must be sufficiently time-delayed and limited in amount so that the accredited organization's game coverage cannot be used as a substitute for, or otherwise approximate, authorized play-by-play accounts." While the league is trying to protect coverage of games, its ban poses an all too valid question: exactly who is the media? Journalists? Professional bloggers? Amateur bloggers live tweeting the game, either from home or the stadium?

Apple has approved the Vonage iPhone application. The app will allow users to make phone calls over the Internet, circumnavigating AT&T's built in mobile plan. While Vonage's application is not yet available to the public, in the wake of Apple's rejection of the Google Voice application, one has to wonder exactly what the different the two services are.

AMC renewed its hit series Mad Men for a fourth season. The critically acclaimed series, which has helped AMC become a major cable destination, recently drew a record 4.5 million viewers, as well as 16 Emmy nominations. As the show continues to grow in popularity, AMC hopes the domino effect will heat up its other programs, increasing revenue across the board.

eBay announced that it intends to sell 65% of Skype to a private equity group. The deal, worth over $2 billion, finds eBay selling off an asset many believe it had no place in purchasing in the first place. While eBay will keep a 35% share of the company it purchased in 2005 for $2.6 billion, the company has yet to find many synergies between the communications service and its auction business.


Shelly Palmer is a consultant and the host of MediaBytes with Shelly Palmer a daily show featuring news you can use about technology, media & entertainment. He is Managing Director of Advanced Media Ventures Group LLC and the author of Television Disrupted: The Transition from Network to Networked TV. Shelly is also President of the National Academy of Television Arts & Sciences. You can join the MediaBytes mailing list here. Shelly can be reached at shelly@palmer.net For information about Get Digital Classes, visit www.shellypalmer.com/seminars


Mark Pasetsky: Robert Pattinson & Kristen Stewart Engaged, Tori Spelling’s Loveless Marriage, Jaycee Dugard’s Story: Celeb Weekly Sneak Peek

What's new this week in the world of celebrity? Here's a quick recap.

Kristen Stewart & Robert Pattinson are engaged.

Eddie Cibrian and LeAnn Rimes go public in a big way.

Jaycee Dugard reveals her amazing story.

Brad Pitt and Angelina Jolie are separated while daughter Shiloh is all grown up.

And, Tori Spelling is in a loveless marriage.

Let's take a closer look at this week's covers -- and sound off in the comments section about your favorite and least favorite cover.


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Visit CoverAwards to see full-size images of this week's celebrity weekly covers.

Robert Pattinson and Kristen Stewart are deeply in love, according to OK! Magazine.* Weeks after moving in together, Rob proposes to Kristen on set in Vancouver. Find out why the couple is moving so fast! Plus, OK! features the 25 best bikini bodies with Britney Spears and Kim Kardashian making the cover while the Bachelorette's Jillian Harris and her fiance Ed Swiderski share their vacation pics!

Meanwhile, Jaycee Dugard's 'Amazing Story' is the cover of People Magazine. Dugard's kidnapping, captivity and her heartbreaking reunion with her family are featured in this week's issue. You'll also find out how Jaycee and her two daughters will rebuild their lives after 18 years in captivity. In addition, Senator Ted Kennedy's life in pictures as well as Shania Twain's new love make the cover of People.

While lovers LeAnn Rimes and Eddie Cibrian steam up the beach, their spurned spouses become angry allies, according to new cover of Us Weekly. Fighting back tears, Dean Sheremet tells Us, 'I'm doing OK.' In other news, Shania Twain finds love with her best friend's ex, DJ A.M. had secret demons, and Melissa Rycroft reveals her wedding details.

2009-09-02-magsb.jpg

Visit CoverAwards to see full-size images of this week's celebrity weekly covers.

Brad Pitt & Angelina Jolie continue to have problems brewing in their relationship, according to the new issue of In Touch Weekly. "Trapped under one roof with a demanding Angelina, a fed-up Brad moves into his own part of their French mansion. Now, Brad admits a split is inevitable," reports In Touch. In addition, Beyonce has a new body and Lindsay Lohan was robbed by another celebrity. Plus, Jaycee Dugard's amazing second chance story wraps up this week's cover of In Touch.

Star Magazine's latest cover is reporting Tori Spelling & Dean McDemott's marriage is a lie. "It's all about the money and there's no prenup," says the tab. In a blockbuster interview, Dean's best pal reveals to Star Magazine how Dean schemed to win Tori's heart, even though she looked "like a horse." In other news, Nicole Richie collapses and had a last minute baby-crisis after she found out her former fiance, DJ AM, passed away. Plus, Ashlee Simpson appears to be having some marriage trouble and has kicked husband Pete Wentz out of their home.

Life & Style's
** cover features Shiloh Jolie Pitt and dives into her world. According to the tab, "Brad & Angelina's little tomboy is all grown up!" Shiloh is taking flying lessons, wants a career in acting, and is never with her brothers. Meanwhile, Halle Berry is pregnant and Holly Madison reveals why she changed her body and face.

Visit CoverAwards to see full-size images of this week's celebrity weekly covers.

Mark Pasetsky is the editorial director for CoverAwards.com, which is best known for analyzing magazine and catalog covers from around the world. In addition, *Pasetsky serves as an editorial consultant for OK! Magazine and is the editorial director for Taraci.com. Previously, **Pasetsky served as the Editor in Chief for Life & Style Weekly.


Where are the Journalism Jobs? Find out here.



Sony Plans 3-D Television By Late 2010

TOKYO — Sony Corp. plans to introduce a liquid-crystal-display television capable of displaying 3-D video by the end of 2010, according to a person familiar with the matter.


Maddow Interviews Tom Ridge About Iraq Intelligence, Hurricane Katrina, Politicized Threat Levels (VIDEO)

Rachel Maddow interviewed former Homeland Security Secretary Tom Ridge tonight, who is out promoting his new book The Test of Our Times, and she confronted him over his statements linking domestic security to going to war in Iraq.

Ridge denied that any political considerations went into the decision, instead saying that it was all based on intelligence. Maddow replied:

When I look at your record, I feel like you didn't slip in a reference to the president and a reference to Iraq once in this mention in 2004. You were a crucial, authoritative part of making what turned out to be a false case to the American people abut Iraq being a threat and us needing to attack them.

Maddow then quoted back Ridge a statement of his from 2003, a month before the invasion of Iraq began, in which he stated that he agreed with Bush that Iraq has chemical and biological weapons, and is trying to develop nuclear ones, and has the "means of delivery." She asked Ridge if looking back, he regretted that statement. Ridge answered, "No." Does he still think it's true: "At the time I think it's true, and subsequent to that [Bush's] leadership and the things we've done have kept America safe."

Ridge insists, to a skeptical Maddow, that Iraq was an intelligence failure and not a politicized decision.

The interview covers a lot of ground and it's worth watching in full. It's split into three parts below.

Maddow discusses Iraq War intelligence with Ridge:

Ridge on what happened during Hurricane Katrina:

Ridge clarifies quote on politics being considered when raising the nation's threat level: