March 16--A purchase of the Orange County Register and other newspapers by the parent company of the Los Angeles Times could raise antitrust issues by depriving readers and advertisers of competition, the U.S. Department of Justice has said.
The department's antitrust division told Freedom Communications, the bankrupt owner of the Register and Riverside Press-Enterprise, that it would intervene if the company and its creditors select Tribune Publishing at Wednesday's auction.
"The division believes that the acquisition of Freedom assets by Tribune Publishing Company poses a serious risk of harming newspaper readers and advertisers in Orange County and Riverside County," Assistant Atty. Gen. William Baer, head of the antitrust division, wrote in a letter sent Tuesday to an attorney representing Freedom.
The letter adds a potential complication to the auction, which was shaping up to be a battle among three companies with strong local interests: Digital First Media, which owns the Los Angeles Daily News; Tribune Publishing; and a group of Freedom insiders backed by Orange County real estate developer Mike Harrah.
Antitrust authorities said they do not have the same concerns with the other two bidders.
Tribune Publishing could be forced to sell off some assets or take other steps to secure the Justice Department's consent on a winning bid.
A spokesperson for Tribune declined to comment, and attorneys for other parties were not immediately available for comment.
Digital First Media was selected Sunday in a "stalking horse" phase of bidding, which would effectively set a $45.5-million threshold in Wednesday's auction.
The insiders group, which also includes Freedom co-owners Rich Mirman and Eric Spitz, and Tribune Publishing would be allowed to sweeten their early offers.
U.S. Bankruptcy Court Judge Mark S. Wallace has scheduled a March 21 hearing in Santa Ana to approve the sale, which is expected to close by the end of the month.
Freedom filed for bankruptcy protection in November after an unsuccessful expansion of the company's print publications by greeting card entrepreneur Aaron Kushner and Spitz, who acquired the company in 2012. Kushner left the paper last year.
Twitter: @LATgeoffmohan
