Gazette owner to file for bankruptcy
NEW YORK — Freedom Communications, the owner of the Colorado Springs Gazette, is expected to file for Chapter 11 bankruptcy protection this week, according to a published report.
The Wall Street Journal reported on its Web site Sunday that the privately held company has reached agreements with its lenders to restructure its debts. The report cited unnamed people familiar with the situation.
Jeff Thomas, editor of the Gazette, said the newspaper's focus won't change.
"As Freedom negotiates with its lenders, the Gazette's focus will remain on covering the Pikes Peak Region," said Thomas. "It's hard to predict anything in this business in these times, but it's also hard to imagine that any corporate owner would want this organization to stray from our commitment to this community.
"No matter who sits on Freedom's board, The Gazette will only be as valuable to the corporation as we are valuable to citizens of this region. Our job, under any ownership, will be to make ourselves as relevant and necessary to Colorado Springs as possible."
Robert Emmers, a spokesman for Freedom, declined to comment Sunday night on the possibility of a bankruptcy filing, but he told The Associated Press that the company is "continuing to work with its lenders to resolve (its) balance sheet issues."
Freedom’s lenders were expected to take control of the company while it operates under bankruptcy protection, the Journal reported. The lenders — including J.P. Morgan Chase & Co., SunTrust Banks and Union Bank of California — hold about $770 million in debt.
Freedom was founded in the 1930s by R.C. Hoiles and is still majority owned by the Hoiles family. Besides its flagship Orange County Register, the company owns 32 daily and 77 weekly newspapers, plus several television stations.
Family members representing about one half of the Hoiles clan sold their stake in the company more than five years ago when private-equity firms Blackstone Group and Providence Equity Partners acquired a 40 percent share for about $460 million. The stake of the remaining family members likely would be wiped out by a bankruptcy filing, the Journal said.
Freedom’s Chapter 11 filing would be the latest in a long line of bankruptcy cases involving media companies that have struggled with a sharp drop in advertising revenue brought on by the growth of the Internet and compounded by a long recession.
Freedom announced last month that it would reduce pay across the board by 5 percent, and The Gazette has announced cost-cutting measures this year including unpaid furloughs and salary freezes.
