• by Sara Guaglione , March 16, 2016

Tribune Publishing’s plans to acquire the Orange County Register have hit a snag. The U.S. Department of Justice has sent a letter to the lawyers representing the newspaper’s parent company, Freedom Communications, alerting them that Tribune’s bid could raise antitrust issues.

“The division believes that the acquisition of Freedom assets by Tribune Publishing Company poses a serious risk of harming newspaper readers and advertisers in Orange County and Riverside County,” Assistant Atty. Gen. William Baer, head of the antitrust division, wrote in a letter sent Tuesday to an attorney representing Freedom, the bankrupt owner of the Register and Riverside Press-Enterprise.

According to a report from the Los Angeles Times, the DOJ’s antitrust division told Freedom that it would intervene if the company selects Tribune Publishing at Wednesday's auction.

“If Freedom selects Tribune as its purchaser, the Division will exercise its antitrust law enforcement responsibilities to ensure that the transaction does not deprive newspaper readers and advertisers in these areas of the benefits of competition,” the letter stated.

Antitrust authorities said they do not have the same concerns with the other two bidders -- Digital First Media, which owns the Los Angeles Daily News and several papers in the South Bay and San Gabriel Valley, and a group of Freedom insiders backed by Orange County real estate developer Mike Harrah.

Digital First Media was selected Sunday in a “stalking horse” phase of bidding, setting the minimum bidding price at $45.5 million in today’s auction.

Ironically, both Digital First Media and Tribune Publishing are saddled with debt. DFM’s paper, The Denver Post, is suffering from staff cutbacks and the resignation of one of the paper’s editorial writers, Jeremy Meyer.

Tribune Publishing lost $2.7 million last year on $1.67 billion of revenue. Their plan to acquire Freedom’s newspapers is funded mainly by an investment from Michael Ferro, who purchased a 16.6% stake in Tribune for $44.4 million earlier this year.

Tribune wants to buy the Register and Press-Enterprise to expand its business base in the Southern California region, while cutting costs among its newspapers by consolidating printing and distribution operations.