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FRACTIOUS FAMILY SEEKS TO LIQUIDATE LIBERTARIAN FREEDOM California's Orange Country Register, 38 other papers, up for grabs.

Fractious families are the mother's milk of the media business -- without them, most media conglomerates would not have grown.

And so it was last week that the latest in a long and illustrious line of fractious families -- the Hoiles of California's Orange County -- voted to put a "for sale" sign on Freedom Communications Inc., a multimedia company that owns 28 daily newspapers, 37 weeklies and eight TV stations.

The flagship paper is the almost 400,000-circulation Orange County Register of Santa Ana; Freedom is headquartered in nearby Irvine.

Whether it will be sold as a package or broken up into components remains to be seen, but analysts estimated that the company is worth anywhere from $1.5 billion to $2 billion.

The Hoiles join such important U.S. newspaper families as the Binghams, the Cowles, the Taylors, the Chandlers, the Pulliams and the deYoung-Thieriots in either the cantankerous or resigned conclusion that finances outweigh any sentimental commitment to the newspaper business.

Though the Hoiles family has put an interesting twist on the scenario -- in Orange County it is the fourth-generation of the founder who want to keep the company in family hands, while the third-generation seeks liquidity -- in essence it's the same old story: as generations drift away from having "ink in their blood," they become more concerned with financial returns and a specific desire to cash out their ownership and diversify.

For some companies, though, it has been an issue of acquire or be acquired.

The Hoiles family has been in turmoil for more than 20 years, essentially because some in the family think the founder's belief in political libertarianism -- which advocates only a limited role for government -- flew directly in the face of owning broadcast properties, which are licensed by the government. The company went into broadcasting despite that argument and certain members of the family have been agitating to liquidate their positions ever since.

In addition, the company suffered a $110 million loss in its magazine and Internet operations in 2001, prompting the ouster of a chief executive and a segment of the family crying mismanagement.

Most large multimedia companies have been suggested as potential suitors; the names Dow Jones & Co. Inc., Gannett Co. Inc., Hearst Corp., Knight Ridder Inc., The McClatchy Co., Media-News Group Inc., the New York Times Co., E.W. Scripps Co. and Tribune Co. were bandied about by analysts and wire services alike.

The Hoiles family has retained the investment banking firm of Morgan Stanley to solicit bids for both the entire company and for components for cash or stock. Alan Bell, Freedom's chief executive, said that those bids would establish a market value for the company, which could then be used in other potential transactions, including taking the company public, an acquisition by an employee stock ownership plan or an outright buyout of the dissident family members by the fourth generation.

Another factor will be whether the family demands that the newspapers retain their libertarian editorial stance if they're acquired by other companies.

The Register quoted its local Republican congressman, Rep. Dana Rohrbacher, as saying, "I would hope that they don't just take the highest bid. It would be unseemly for the Hoiles family, after preaching to all of us all these years, to sell their paper[s] to a dirty, rotten, pinko rat. I hope it will stay in the hands of patriots who love liberty and justice."

Whether acquired by pinkos or patriots, Freedom Communications is certainly the biggest fish in the water in recent years and all the sharks will be circling (as will the fisherpersons and the environmentalists, not to mention the government in the form of the Federal Communications Commission and the U.S. Justice Department). Stay tuned, boys and girls, this soap opera ain't soon to be over.
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Title Annotation:Hoiles family places Freedom Communications Inc. up for sale
Comment:FRACTIOUS FAMILY SEEKS TO LIQUIDATE LIBERTARIAN FREEDOM California's Orange Country Register, 38 other papers, up for grabs.(Hoiles family places Freedom Communications Inc. up for sale)
Publication:NewsInc
Geographic Code:1USA
Date:Mar 10, 2003
Words:632
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