Newspaper publisher Digital First Media is paying a reduced price for the Orange County Register and Riverside Press-Enterprise.
A federal bankruptcy court judge this morning approved a final purchase price of $49.8 million for the assets of bankrupt Santa Ana publishing company Freedom Communications. That's $2 million less than Digital First, which owns the Los Angeles Daily News and other local daily papers, had been set to pay last week.
The price reduction stems from "certain newly discovered facts" about Freedom's business operations, according to a document filed with the bankruptcy court Tuesday afternoon. Neither the document nor an attorney for Freedom disclosed what those new facts were.
"There were a number of issues that led to the $2 million purchase price reduction," said Alan Friedman, one of Freedom's attorneys.
With the approval, Digital First's acquisition of Freedom is set to close Thursday, the same day Freedom was set to run out of financing from its bankruptcy lender.
It was critical for a sale to close by that deadline, a key reason that Freedom will go to Digital First instead of Los Angeles Times owner Tribune Publishing.
Tribune had outbid Digital First at a bankruptcy auction earlier this month, with an offer of $56 million, but the federal Department of Justice filed a temporary restraining order halting that deal, arguing Tribune's purchase would create a newspaper monopoly.
The Justice Department's involvement would have prevented Tribune from closing a deal by the March 31 deadline, allowing Digital First to win with its lower bid.
With the Register and Press-Enterprise, Digital First will control a chain of 11 daily newspapers in Southern California serving Los Angeles, Orange, Riverside and San Bernardino counties.
Combined, those papers will have a Sunday circulation of about 600,000, according to the latest data from the Alliance for Audited Media. That compares with a combined Sunday circulation of about 880,000 for the L.A. Times and San Diego Union-Tribune.
Once the sale closes, Digital First, based in Denver, would own 57 daily newspapers nationwide, including a dozen in Northern California. Digital First is owned by New York hedge fund Alden Global Capital.