Tribune Publishing, the parent company of The Los Angeles Times, won an auction for The Orange County Register and The Riverside Press-Enterprise this week with a bid of $ 56 million in cash, the company said Thursday.
The deal is still subject to court approval at a hearing scheduled for later this month, because the parent company of the two newspapers, Freedom Communications, filed for bankruptcy late last year.
The agreement, if approved, would end a long process for both Tribune Publishing, which has coveted the Southern California newspapers as part of a plan to expand its reach and streamline costs, and Freedom Communications, which initially aimed to revamp the newspaper business in the region but fell victim to the same forces that have besieged newspapers across the country.
Tribune Publishing, which also owns The Chicago Tribune and The Baltimore Sun, among other newspapers, took on $ 44 million in new investment this year in an effort to bolster its cash reserves. The investment came from Michael Ferro, a Chicago entrepreneur and the majority owner of The Chicago Sun-Times. Mr. Ferro, who also became board chairman, was instrumental in replacing Tribune's chief executive, Jack Griffin, last month with Justin C. Dearborn, the former chief executive of Merge Healthcare and a close associate of Mr. Ferro.
That investment was taken, in part, to enable purchases like that of The Orange County Register and The Riverside Press-Enterprise. The Tribune Company's financial position remains unclear, however. In a filing with the Securities and Exchange Commission this week, the company disclosed that it had found "material weaknesses in the company's internal control over financial reporting." Those material weaknesses, it said, "could result in misstatements of the accounts and disclosures that would result in a material misstatement of the annual or interim consolidated and combined financial statements that would not be prevented or detected."
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