Freedom Communications to declare bankruptcy

Yes, I’ve heard.

Freedom Communications is expected to file for bankruptcy this week under a plan that will hand the owner of the Orange County Register and 30 other newspapers around the country to its lenders, people briefed on the matter told DealBook.

A filing by Freedom, which could be made as soon as Tuesday, would be the latest by a newspaper publisher as the industry struggles to cope with declining advertising revenue and heavy debt loads. Several big publishers have already declared bankruptcy over the last 12 months, including the Tribune Company and the owner of Philadelphia’s two major papers.

Freedom’s bankruptcy will probably wipe out the 45 percent equity stake held by two big private equity firms, the Blackstone Group and Providence Equity Partners .

That outcome could mirror what is expected in Tribune, whose expected reorganization plan will probably wipe out the equity stake of the billionaire investor Samuel Zell, who took the company private in 2007.

The majority of Freedom is still owned by the Hoiles family, whose patriarch, R. C. Hoiles, founded the company seven decades ago as an outlet for his libertarian philosophy. Freedom took on the investments by Blackstone and Providence nearly six years ago to allow some Hoiles family members to sell their stakes in the company, ending strife within the clan.

No, I don’t know what it’s going to mean. After all, when the Chicago Tribune bought the LA Times, my division at the LA Times Syndicate had a counterpart in Chicago, but we were fewer in number, had more products, more customers, more revenue — and got the axe anyway.

In that same vein, in a newspaper industry that I’ve described before as the dinosaurs arguing about what that meteor that just hit the planet is going to mean for them, the Hesperia Star is a healthy little mammal. Not only are we not losing our collective shirt, we’re growing in revenue. Small newspapers, like the small mammals, are thriving around the country. Unlike, say, coverage of Capitol Hill, there’s just not that many competing sources of news of Main Street.

That said, I felt pretty confident about the prospects of the new media group at the LA Times Syndicate, too, and I ended up being the guy training the folks in Chicago who ultimately closed out our contracts and put bullets in the brains of the products we’d worked so hard to create. So we’ll see.

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