Judge Blocks L.A. Times Publisher from Acquiring Competing Newspapers

Traffic passes outside the Tribune Tower building, as the Tribune Co., publisher of the Chicago Tribune and Los Angeles Times, was the successful bidder at a public bankruptcy auction to acquire substantially all of the assets of Freedom Communications Inc., owner of the Orange County Register and the Press- Enterprise in Riverside. (Thinkstock: Photo by Tasos Katopodis/Getty Images)

A U.S. District Court judge Friday approved a temporary restraining order to block Tribune Publishing’s purchase of the Orange County Register and the Riverside-based Press-Enterprise.

U.S. District Court Judge Andre Birotte Jr., scheduled a hearing for March 28 to decide whether to block the sale beyond that date on antitrust concerns that the sale would harm consumers and advertisers, the Los Angeles Times reported.

In a court filing today, Tribune said the restraining order would, in effect, shut it out of the sale because a bid must be approved quickly in U.S. Bankruptcy Court, according to The Times.

The publishing company said Freedom Communications Inc., owner of the Orange County Register and Press-Enterprise, will run out of financing March 31, The Times reported.

Tribune Publishing Co. was the top bidder at a public bankruptcy auction this week to acquire substantially all of the assets of Freedom Communications Inc.

However, the U.S. Department of Justice quickly filed a civil antitrust lawsuit seeking to block the acquisition of Freedom’s newspapers by the publisher of the Los Angeles Times.

According to the department’s complaint, filed in Los Angeles federal court, The Times and the Register together account for 98 percent of newspaper sales in Orange County and the Los Angeles Times and Freedom’s newspapers together account for 81 percent of English-language newspaper sales in Riverside County.

Tribune’s acquisition of its most significant competitor would give it a monopoly over newspaper sales in each county and allow it to increase subscription prices, raise advertising rates and invest less to maintain the quality of its newspapers.

“If this acquisition is allowed to proceed, newspaper competition will be eliminated and readers and advertisers in Orange and Riverside counties will suffer,” Assistant Attorney General Bill Baer of the DOJ’s antitrust division, said earlier in the week..

“Newspapers continue to play an important role in the dissemination of news and information to readers and remain an important vehicle for advertisers. The antitrust division is committed to ensuring that competition in this important industry is protected.”

Under the terms of the bid, Chicago-based Tribune Publishing has agreed to pay $56 million in cash for Freedom Communications and its real estate in Santa Ana and Riverside, according to the company.