Co. ensures founder's heritage, philosophy preserved
Newspaper and broadcast group Freedom Communications announced the sale of a major stake to two big buyout firms, ending a lengthy and contentious auction for the family-owned Irvine, Calif., group.
Freedom’s board voted Tuesday to partner with Blackstone Communications Partners and Providence Equity, who will buy out willing family members for an undisclosed amount but allow others to maintain ownership positions. Freedom said the peculiar pact would ensure “continued control by descendents of founder R.C. Hoiles, whose heritage and libertarian philosophy will be preserved.”
The agreement by Blackstone and Providence to honor disparate positions of a feuding family gave them the edge in a lively bidding war that many said spoke well for the prospects and popularity of the media sector — even in a sluggish economy and at a grim time for newspaper advertising.
Gannett and a handful of private equity firms were all in the running for Freedom, which put itself on the block last spring.
Freedom owns 28 dailies, including the Orange County Register, 37 weekly newspapers and eight TV stations — five CBS and three ABC affiliates. It’s the third-largest family-owned newspaper biz in the U.S. after the Hearst and Newhouse groups.
Alan Bell, Freedom’s relieved president and CEO, called it “a truly happy day.”
In a candid statement, he said, “The goal from the beginning has always been fairness to everyone’s objectives — no simple task in a multi-generational family not shy to express its views. This partnership we are announcing has managed to thread the needle in a stiff wind of often noisy contention. It works for everybody. It is that rare solution to a dispute in which everyone wins — including the 7,000 employees of the company coast to coast who have followed every chapter of this widely discussed process.”
Some owners, including Tim Hoiles, a grandson of the founder, have badly wanted to cash out for years. Others wanted in. Still others were mostly concerned that the distinct editorial voice of the properties be preserved. (The libertarian view is down on government and up on individual rights.)
“I am thrilled with the decision the board has made today. This is a great outcome for shareholders,” Tim Hoiles said in a statement.
The deal reinforces the continued interest of private equity firms in the media and entertainment biz. Blackstone owns 50% of Universal theme parks and was part of a consortium that bought Houghtom Mifflin from Vivendi. Providence put some cash behind Edgar Bronfman Jr. in his run at Universal. A number of them are eyeing Warner Music.