For Freedom Communications, bankruptcy is no surprise
According to papers filed in the U.S. Bankruptcy Court in Wilmington, Delaware, Freedom had assets of as much as $1 billion with an equal amount of debt. Freedom says a majority of its creditors had agreed to the restructuring plan, Bloomberg News says.
In a statement before the U.S. Bankruptcy Court, Freedom Communications attorney Robert Klyman declared that this was a "great day" for the company, because it reached an agreement with the majority of its creditors. CEO Burl Osborne was more circumspect, saying the "announcement is positive news for the company and all of our associates, who have been making extraordinary efforts to transform our business."
It's doubtful that employees feel the same way. As the Associated Press pointed out, the company announced last month that it would slash pay by five percent. The Orange County Register has announced layoffs, unpaid furloughs, and salary freezes this year. More layoffs seem to be a sure bet as the publisher restructures its operations.
The company also has to operate in an extraordinarily difficult market in Southern California. Shifts in demographics and ad spending sent the the Register's larger rival, The Los Angeles Times, into a tailspin that will be difficult to recover from.
The Register competes head-to-head against the Times in suburban Los Angeles. Recently, as both papers' circulations were in freefall, the Times began delivering the Register to subscribers; like its larger competitor, the Register needs all the help it can get.
"The Register's average weekday circulation fell 12 percent to 233,626 in the six months through March from a year earlier, according to the Audit Bureau of Circulations, exceeding the industry's 7.1 percent decline," Blooomberg said. With circulation figures like that and a terrible advertising environment, bankruptcy was inevitable.