Freedom/OCR employees have been warned

Emailed to me last night. I figure there are some uneasy feelings in OC today.
The following was sent out to OC Register "associates" on Friday.

Dear Associate:

This notice is being provided to you pursuant to the federal Worker Adjustment and Retraining Notification Act and the California Labor Code Section 1400 et. seq. (together, the “WARN Act”). The information contained in this notice is based on the best information currently available to us.

You are receiving this notice because you are an employee of one of the following entities, all of which are located at 625 N. Grand Ave., Santa Ana, CA 92701 (collectively, “Freedom”):

• Freedom Communications, Inc.;
• Freedom Communications Holdings, Inc.
• OCR Community Publications, Inc.; or
• Freedom Services, Inc.

As background, in connection with Freedom’s bankruptcy proceedings, Freedom’s assets will be sold at an auction. The winner of the auction should be determined by March 21, 2016, and the closing of the asset purchase should occur on March 31, 2016. Thus, your employment with Freedom will terminate on March 31, 2016, absent a change in the auction schedule. The buyer of Freedom’s assets, or an affiliate of the buyer (together, the “Buyer”), may offer you employment (which is Freedom’s desire but beyond its control), or the Buyer may not.

This notice provides you with notice under the WARN Act that you may experience a loss of employment, depending on whether the Buyer offers you employment and maintains your employment. That loss of employment will be experienced on or after March 31, 2016, although the precise date of that loss is uncertain, given the uncertainty of who will acquire Freedom’s assets and the Buyer’s intentions for hiring Freedom’s employees and then maintaining their employment. We would prefer to provide you with more concrete information, but the outcome of the bankruptcy auction is uncertain and depends on factors that are outside of Freedom’s control.

February 12, 2016


Page 2


The termination of your employment for WARN Act purposes may be temporary or permanent and the decision will be made at the Buyer’s discretion. Because of the composition of our employee workforce, there are no bumping rights that exist.

You will continue to be paid your regular rate of pay in accordance with normal payroll cycles until you are terminated from Freedom. The day after you are terminated, your regular pay will cease in accordance with Freedom’s customary practices. All current benefits programs will remain in effect through end of that month.

You may be eligible to receive severance pay upon termination of employment from Freedom. Details of any severance pay will not be available until the bankruptcy judge approves or rejects a proposed severance payment plan that Freedom has submitted to the bankruptcy court.

We anticipate providing further notices to comply with the WARN Act and to keep you informed of the auction status, so that you can plan for a potential loss of employment. In the meantime, nothing in this notice changes the terms of your employment, and if you have questions, please contact ...

 

The major bidders are Digital First, which I'm guessing would make them part of LANG along with the Daily News, Press-Telegram, ect.; and Tribune, which already has the LA , Times and Union-Tribune.

All part of the fallout from Kushner and Spitz's takeover of the Register that sent Freedom into bankruptcy.

 

It seems that Tribune and Digital First are now the only two announced bidders.

Tribune Publishing, Digital First Media bid to buy bankrupt O.C. Register

Tribune just sold one/sixth of the company for 44 million in a move many believe is an attempt to come up with enough cash to buy the OCR at the auction.

 

The WARN Act is purely procedural. Teachers get layoff warnings every spring, then when plans are being finalized for next fall, if they have to reduce staff, the notice has already been given. For the workforce at OCR, they will get reamed if the Trib or Digital First get it. They will probably be OK if current CEO Mirman and his $$$ partner, Mike Harrah, get it. Mirman was quoted in his paper that he still will bid during the real auction in March, but they didn't think it was in their best interest to get involved in the stalking horse aspect. Pension money is huge in this whole transaction.

 

If the Tribune won the bid could they use their existing printing plant, distribution system and editorial staff to produce an Orange County edition of the LA Times (though the masthead would probably still read the Orange County Register)?

The article I read said the Mirman group was worried about getting outbid because the Tribune of Digital First could cut a lot of costs in a merger and use the savings to justify a higher price. I don't think any bidder is goiung near the pension fund liability that I read was about 155 million.

 

There are still anti-trust issues with newspapers? In 2016?

I figured the ultimate argument to the government would be, "Just be happy anyone wants to buy one of these things."

 

Tribune would be making a mistake to think that Orange County readers want L.A.-centric coverage of sports and that they only need one L.A. Times writer to cover the Angels or other beats. It might save money but it won't add content, readers or clicks.

 

Digital First Media makes initial bid of $45 million for OCR/Riverside Press Enterprise

Digital First Media bids $45.5M for Orange County Register, Riverside Press-Enterprise

 

"DFM’s bid does not include taking on Freedom’s pension obligations.

“The liabilities were excessive,” Hasse said in an email. “Our understanding is that the pension accountability will be shifted to the (Pension Benefit Guaranty Corp.).”

The PBGC is a government agency that insures private-sector retirement plans and guarantees pension benefits up to $60,136 per year, according to its website."

 

There was a story early last week in which Ken Doctor predicted a total sales price in the $40 million to $65 million range including property. The papers themselves are worth maybe $15 million.

Santa Ana Showdown: Tribune’s Bid for Southern California

I'll repeat a question here that I put elsewhere and nobody commented.
If LANG gets OCR/RPE, which paper becomes the flagship of the chain? (Which BANG paper is the flagship? SJ Merc? Contra Costa?) Usually the papers that "are acquired" become the redheaded stepchild and get stomped on (see Seattle PI taking it in the shorts by the Seattle Times, etc.). For sports, it matters on the downtown beats: Dodgers, Angels, Kings, Ducks, Lakers, Clippers, Bruins, Trojans, and now Rams. Virtually across the board, OCR writers are better the LANG writers (I would estimate that the majority of the LANG staffers have inquired about working at OCR). Wonder how it will shake down.