BUSINESS

O.C. Register owners quit: Aaron Kushner, Eric Spitz resign executive duties

When Aaron Kushner bought the Orange County Register and announced his plans to double down on print journalism, media experts asked: Could he save the newspaper industry?

On Tuesday, Kushner and his partner, Eric Spitz, resigned from executive duties at the paper and Freedom Communications Inc. Their bold expansions failed after sharp staff reductions, furloughs and closures of the Los Angeles and Long Beach papers they had launched with great fanfare. Now, several media experts say the financially strapped company is readying itself for a potential sale.

“I was rooting for him, but much in the way you'd be rooting for Captain Smith to succeed in saving the Titanic after it hit the iceberg,” media consultant Gordon Borrell said. “It appeared to be one poor decision after another.”

Kushner told The Times he still believes “that a solid future lies ahead for newspapers that are able to deliver great value to their subscribers and advertisers both in print and digitally.”

“That's why we bought into the newspaper business three years ago and I have not changed my ownership interest,” he said in an email. He added that the company has upgraded its digital efforts with revamped websites and a new iPad application.

Even in an era when the struggles and uncertainty of the newspaper industry are widely known, the speed of Kushner's rise and fall in Southern California took many outside experts by surprise.

“There's no other story like this in the country,” said Ken Doctor, a news industry analyst and author of the blog Newsonomics. “There's nothing where we've seen this level of change, commitment, pullback and financial woes in such a small period of time.”

As reporters gathered for Tuesday afternoon's announcement at the Orange County Register in Santa Ana, Kushner stood mostly silent, according to several employees who asked to remain anonymous for fear of losing their jobs. Spitz urged staff members to pen thank-you notes to Kushner and to “think about” what they should be grateful for.

“We had no idea a resignation was coming today, though we knew it would happen fairly soon,” one employee told The Times.

Many staffers expressed concern about what lies ahead.

The resignations come after a tumultuous year in which the company launched a Los Angeles paper, only to close it five months later. The company sold the Orange County Register's Santa Ana headquarters to a local developer in September for $27 million, and is leasing back the building.

Kushner, a former greeting card executive, resigned from his duties as chief executive and chairman, and Spitz resigned from the role of president, though he will remain as company chairman.

Publisher Rich Mirman, a former casino marketing executive who was brought on in October, will take over as president and chief executive. Kushner and Spitz still have an ownership stake in the company that they purchased out of bankruptcy through a Boston-based investment group in July 2012.

They drew the attention of many in the media industry by pledging to beef up the investment in print papers rather than digital operations, hiring about 175 new reporters and editors at the Orange County Register and purchasing the Riverside Press-Enterprise in 2013.

Financial trouble quickly surfaced. Amid delays in closing the Press-Enterprise deal, the former owner, A.H. Belo Corp., required that Kushner put down a $1-million nonrefundable deposit and prove that his company was solvent.

In October, the Los Angeles Times sued the Orange County Register, saying it had failed to pay $2.5 million it owed The Times for delivering its papers. The Orange County Register hired a new delivery service, but subscribers said they went days without receiving their papers.

In November, the Orange County Register offered to pay reporters and other employees to start delivering papers themselves.

In recent weeks, Orange County Register employees said Kushner had not often been seen around the newsroom, while Mirman — the publisher and newly installed chief executive — made it clear that he was available.

Mirman declined an interview with The Times but said in a statement that Tuesday's leadership change is a continuation of his plan to “stabilize our business and ultimately position ourselves for success.”

“We remain committed to our plan for improving how we serve our core markets in Orange County and the Inland Empire,” the statement read.

Doctor, the media analyst, described Mirman's role as that of “a repairman.”

“The process will continue where he unwinds the damage,” Doctor said. “His job is to steady the place and to get it ready for another owner.”

chris.kirkham@latimes.com

Times staff writers Lauren Raab and Melody Petersen contributed to this report.

 

Copyright © 2016, Los Angeles Times

UPDATE:

5:18 p.m.: This post was updated with details from the town hall meeting and comments from staffers.

6:30 p.m.: This post was updated with comments from media experts. 

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