June 11, 2012
The Gazette is getting a new owner.
Freedom Communications, which has owned The Gazette for 66 years, announced Monday it has agreed to be acquired by 2100 Trust LLC, a privately held investment group whose CEO once sought to buy the Boston Globe.
Terms of the deal — described by Freedom officials in a news release as a merger with a subsidiary of 2100 Trust — were not disclosed. The sale is expected to be completed in about 30 days and all Freedom employees will transition to the new ownership, said Mitchell Stern, Freedom’s chief executive officer.
In addition to The Gazette, 2100 Trust will acquire The Orange County Register, Freedom’s flagship publication in Santa Ana, Calif.; five other daily newspapers in California and Arizona; and their specialty publications and digital properties.
“While providing the value that our shareholders have sought, this transaction also ensures Freedom’s communities that our newspapers serve will continue to receive the outstanding service that has been our hallmark,” Stern said in the news release. “Our employees will be able to continue the community journalism at which they so excel.”
In a statement e-mailed to The Gazette, Aaron Kushner, 2100 Trust’s CEO, said the Freedom newspapers “are among the best in the business with top-notch reporters, editors and business staff. We are honored to get to work with them and help support them. Our plans begin with serving our communities, and we will do everything we can to ensure the staff has all the resources necessary to continue producing great journalism.
“Our team is excited about this next step,” Kushner said. “We remain committed to our mission of helping strong local newspapers serve their communities. As we see opportunities to buy and support other compelling franchise newspapers we will actively pursue them.”
The deal with 2100 Trust marks a new chapter for both The Gazette and its parent company.
The Gazette traces its roots to the weekly Out West newspaper, which was started by Gen. William Jackson Palmer in 1872, one year after he founded Colorado Springs. The paper went through several ownership changes over the years, eventually becoming a daily newspaper and merging with the Evening Telegraph — becoming known as The Gazette Telegraph.
The publication was purchased in 1946 by Raymond Cyrus “R.C.” Hoiles, the founder of the company that became known as Freedom Communications. The Hoiles family continued to own and operate The Gazette for the next several decades; Hoiles’ son, Harry, was a publisher of The Gazette until 1975.
Freedom grew to operate 28 daily newspapers, 37 weeklies, TV stations and numerous other publications and web sites. But Freedom’s ownership changed in the early 2000s after some family members sought to cash out of the company; in 2003, Freedom took on a pair of investors, whose purchase of a minority stake in the company allowed family members to be bought out.
The newspaper industry, meanwhile, was going through cataclysmic changes; advertisers and subscribers were fleeing to the Internet, costing chains such as Freedom hundreds of millions of dollars in lost revenues and profits. With the industry’s woes compounded by the economy’s fall into recession, Freedom filed for Chapter 11 bankruptcy protection in September 2009.
After it exited bankruptcy in April 2010, Freedom’s ownership changed hands from Hoiles family members to the company’s creditors. Freedom began listening to offers to sell the company, which culminated in Monday’s announcement to sell The Gazette, Register and five remaining daily papers.
On June 1, Freedom announced the sale of properties in Florida and North Carolina. That announcement came on the heels of sales involving Freedom newspapers in the Midwest and Texas. Since January, Freedom also has made announcements involving the sale of newspapers in Indiana and New Mexico, along with eight television stations.
Kushner founded 2100 Trust in 2009 after he left his position as chief executive of Massachusetts-based Marian Heath Greeting Cards, according to an Orange County Register story.
Kushner, who once owned an online company to help people with moving, then organized a group of former media executives and investors to bid on the Boston Globe, The Register story said.
Last year, according to The Register, 2100 Trust reportedly planned to offer more than $200 million to buy the Globe and its related properties. The firm’s plan, however, was short-circuited by the Globe’s owner, The New York Times Co., whose then chief executive, Janet Robinson, said the paper was not for sale.
This year, 2100 Trust appeared poised to buy a controlling interest in MaineToday Media, owner of the Portland Press Herald and several other papers, The Register story said. That deal, however, got derailed over differences with management and union objections to concessions Kushner wanted in work hours, benefits and job protections.
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