WSJ: Freedom Eyeing Bankruptcy
First furloughs, then a pay cut
By Michael Malone -- Broadcasting & Cable, 8/31/2009 1:24:59 PM
Freedom Communications is expected to declare bankruptcy this week, reports the Wall Street Journal. The Journal says people inside Freedom report that the media company has "reached agreements with its lenders to restructure its debts."Freedom owns more than 30 daily papers, including the Orange County Register, and eight TV stations, including WPEC West Palm Beach and WTVC Chattanooga.
The WSJ says Freedom's lenders hold around $770 million in debt. The private equity firms Blackstone Group and Providence Equity Partners acquired around 40% of the company five years ago.
A Freedom spokesperson said the company would not comment on "something that might or might not happen," and said Freedom would "continue to work with lenders to resolve our balance sheet."
Freedom is based in Irvine, Calif. It's been hit particularly hard by the economy, mandating a 5% pay cut for staffers across the board in July, after mandating five days of unpaid leave earlier in the year.
"We are facing the challenge of a general economic situation that experts say will continue to remain weak for many months to come," said CEO Burl Osborne upon announcing the pay cuts. "In this very difficult climate we need to continue to reduce expenses, and we determined that the fairest way to accomplish this with the minimum impact on operations is the action we are announcing today."
Osborne took over for CEO Scott Flanders in June after Osborne jumped to Playboy.
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