NEW FREEDOM AT FREEDOM.
Family members had squabbled for almost 20 years over a variety of financial and management issues, not to mention how the libertarian political bent of the family and the company should be maintained. Chief among the sore points was the ability of third-generation Hoiles relatives to diversify their inheritance, which was tied up in Freedom stock.
Last year the Irvine, Calif.-based company brought in an investment bank and shopped the company around in an effort to placate the quarreling cousins. The company consists of not only the Register, but 27 other daily papers, 37 weekly papers and eight television stations.
Though higher bids were offered, the proposal by Blackstone Communications Partners of New York City and Providence Equity Partners of Rhode Island was the one the family took. Family members received $212.71 per share, it was reported, but for that price the family has 60 percent of the company -- and voting control -- while the investment firms only own 40 percent.
A combined bid by Gannett Co. Inc. and MediaNews Group for $235 per share was rejected, in part because the media companies demanded control of the company.
The newly constituted board of Freedom consists of three family members, three investors, three independent directors and Alan Bell, the company's president and chief executive.
New to the 13-member board is Burl Osborne, the former publisher of the Dallas Morning News and the chairman of the Associated Press. The other independent directors are William Baker, president and chief executive of WNET/Channel 13, the PBS station in New York City, and Scott Flanders, chairman and chief executive of Columbia House, the music and video direct marketing firm.
The board will be headed by a non-executive chairman from the family; Thomas Bassett, a 40-year-old great-grandson of Hoiles who is an attorney and CPA, is serving as interim chairman until an August family meeting when a permanent chairman can be elected.
Bell, the company's president, told the Register that the outcome was "wonderful."
"It provided an opportunity for people who wanted to leave to leave and an opportunity for people who wanted to stay to stay," Bell told the paper. "It's hard to do that with all the bitterness in this family over the decades."
In an interview with the Associated Press, Bell said that the company had posted double-digit profit gains in the first quarter of the year.
"Now that you pull away all the noise," Bell told the AP, "the sky's the limit."
Reports out of Southern California indicate that the Register is seeking to soup up circulation in the tony Belmont Shore beach community with a dedicated home-delivery campaign in the neighborhood, something insiders say would never have happened during the family feud: it would have cost too much.
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|Title Annotation:||Freedom Communications Inc.|
|Date:||May 24, 2004|
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