By: Gary Gentile, AP Business Writer (AP) Shareholders in one of the nation's last family-owned media companies meet this weekend to consider selling or restructuring Freedom Communications Inc.
The 50 or so adult descendants of R.C. Hoiles, who bought the
Santa Ana Register in 1935 and built it into a privately owned media company that now includes newspapers and television stations, will consider a range of options to make it easier to convert their interest to cash.
"The goal is to get a liquidity option for everybody so those who don't want to remain in the business can leave," said Kirk Hardie, the head of the Hoiles Family Council.
Hoiles used his newspaper to promulgate his libertarian political philosophy in Orange County, then a Southern California stronghold of conservatism and the political birthplace of Richard Nixon.
Today,
The Orange County Register has a circulation of 315,000, has won three Pulitzer prizes, and successfully battles the
Los Angeles Times for circulation on its suburban home turf. The paper is the flagship of a group that includes
The Gazette in Colorado Springs, Colo., and the Tribune papers in suburban Phoenix, among 28 daily newspapers, 37 weeklies, and eight television stations.
Among the options the family will discuss are selling shares to the public, starting an employee stock ownership plan, allowing management to buy the company, and an outright sale. Analysts say Freedom is worth between $1.5 billion and $2 billion.
"There are people who want to sell and people who don't, but I think there is a bigger group in the middle who want to wait and see what happens at this meeting," Hardie said. "Discussing liquidity has been on the table for years. Now, some people are at the point where they don't want to wait for it anymore."
The issue is being pressed by Tim Hoiles, grandson of the company's founder and a member of Freedom's board of directors.
Hoiles said he initially hired an investment consultant to advise him on how to sell just his shares. But interest stirred by reports of the family's discussions and overtures from potential buyers have persuaded him the best strategy is to sell the company. "It's probably the only option because it's totally fair to everybody," Hoiles said.
Samuel Wolgemuth, Freedom's president and chief executive, said he does not think a majority of family members support an outright sale.
Analysts say likely Freedom buyers include MediaNews Group, which publishes the
Daily News of Los Angeles and other papers in Southern California, the E.W. Scripps Co. and Gannett Co.
Last year, Freedom lost $94 million before taxes and $64 million after taxes, due to one-time losses on discontinued magazine and Internet investments. Operating income was $88 million, according to figures cited by the
Register. As a private company, Freedom doesn't publicly report full financial information.
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