The End of Freedom Communications? (maybe not)

In 1972, when I was a young political activist working in the antiwar and pro-marijuana movements, I became aware of the Orange County Register. I was working at the campaign office for Prop. 19, the first California marijuana initiative. Word came in that the main newspaper in conservative Orange County had become the first daily paper to endorse our measure. We were amazed.

I found out later that this should have been no surprise. The Register was the flagship paper for Freedom Communications, a libertarian-owned newspaper chain. It had been founded in the early 1930s by R.C. Hoiles, who was to become a leader in the modern libertarian movement.

The Register‘s finest hour came in 1942, when most of the established media were calling for internment of innocent Japanese-Americans. Weeks after the attack on Pearl Harbor, Hoiles wrote clearly against the idea of taking away their liberty and property. The Register continued to run editorial after editorial against the internment and against the rollback of civil liberties in the time of war. The paper was the victim of several bomb threats.

More recently, as the rest of the media piled on to the false claims of the Bush Administration over Iraq, the Register ran many editorials against attacking Iraq. They have continued to support withdrawal from both Iraq and Afghanistan.

Former Register editor John Seiler writes today at LewRockwell.com on the history of Freedom Communications. It is definitely worth reading.

Here is a report on the effects of the bankruptcy from Alan Bock, longtime writer and editor at the Orange County Register and longtime columnist for Antiwar.com.

I am gratified at the number of people who have inquired about the Orange County Register, where I work, and about my personal fate, in the wake of the Register’s parent company, Freedom Communications, filing for bankruptcy under Chapter 11. Whether it was inaccurate or half-accurate news reports or people listening with only half an ear, some people got the impression that we were on the verge of ceasing to publish. Happily, that’s not true.

The Register, unlike many large newspapers, has never gone into the red and is still profitable, though less so than in the company’s and industry’s salad days. Freedom Communications expects a profit of around $50 million this year as well. Trouble is, that’s not enough to service the debt.

The debt arises from the resolution of a family feud among the heirs of R.C. Hoiles, who founded the company and died in 1970 at age 90. The descendants of one of his three children felt they were being squeezed out of significant decision-making and demanded either that the company go public or that they be bought out. Freedom brought in two investment bankers to raise the money to buy out those who wanted it, giving them an equity stake in the company. While they were at it they borrowed a lot more money from a consortium of banks to recapitalize. This was 2004, in the midst of the housing boom, when newspapers were still ridiculously profitable.

We hit the Perfect Storm and then the recession, and profit margins declined precipitously. So the company negotiated with the banks to go into Chapter 11. It’s a "prepackaged" deal; though a bankruptcy court will have to approve the details, in essence the banks reduced the debt from $770 million to $335 million in exchange for ownership of the company (the remaining family members retain 2%).

As Register publisher Terry Horne explained in a series of employee meetings on Tuesday, the banks can’t get the $435 million they’ve foregone with more layoffs and cost-cutting, of which we’ve already had a lot. Their interest, not only to keep payments on the $335 million flowing but to have a prayer of recouping the other money, is for Freedom and the Register to grow to the point that they become attractive items to sell. Right now nobody wants to buy newspapers or TV stations except (maybe) for pennies on the dollar (see San Diego Union-Tribune). If the recession ends and the Freedom newspapers recover and find a way to monetize their Web presence better, there’s a chance – not a guarantee but a chance – that the banks can sell us for enough to recover the money they’ve foregone in Chapter 11.

The upshot is that the Register and other papers will keep publishing for the foreseeable future, while working to improve our Web presence (if you want to help you can click on http://www.ocregister.com/opinion and click around the page for a while fairly often). There’s been no call to change the libertarian character of the editorial pages, not do we expect one. Changing the editorial philosophy is unlikely to improve the bottom line and just might hurt it. Our presumption – we haven’t met our new owners or the board members they’ll appoint and probably won’t for 6 months or so – is that they’re more interested in money than ideology. So we’ll continue to speak out against war and statism as long as possible, which looks like a fairly long time indeed.

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Levy vs. Frum on the US as an ‘Honest Broker’

The Economist is hosting a debate on the proposition: “This house believes that Obama’s America is now an honest broker between Israel and the Arabs.”

The online debate includes comments and voting by the readers.

Daniel Levy of J-Street and the New America Foundation is taking the affirmative, and David Frum of the America Enterprise Institute is taking the negative.

While many Antiwar.com readers might, on the surface, say that the US is not an honest broker, and many would argue that the US should not be a broker at all, this is quite an interesting debate.

Levy is clearly trying to frame the question that Obama is trying to be more of an honest broker than the alternative which, in this case, is Frum, who’s arguing the position that Obama is an anti-zionist Arab/Iran/Muslim-lover.

I urge readers to check out and participate in the debate.

Comments to this blog item will be closed at Antiwar.com. Instead, please comment at The Economist.

Walter Cronkite: ‘We Are Mired in Stalemate,’ 1968

When I watched Walter Cronkite’s heroic commentary in early 1968, I thought the country might finally have turned around on the Vietnam War. But Cronkite was ahead of the curve on Vietnam, and the US remained there for another seven years, costing the lives of tens of thousands more Americans and millions more Southeast Asians.

After Cronkite’s broadcast, President Lyndon Johnson is reported to have said, “If I’ve lost Cronkite, I’ve lost Middle America.” Several weeks later, Johnson announced he would not seek reelection.

Walter Cronkite died today at the age of 92. His 1968 words should be read again:

Tonight, back in more familiar surroundings in New York, we’d like to sum up our findings in Vietnam, an analysis that must be speculative, personal, subjective. Who won and who lost in the great Tet offensive against the cities? I’m not sure. The Vietcong did not win by a knockout, but neither did we. The referees of history may make it a draw. Another standoff may be coming in the big battles expected south of the Demilitarized Zone. Khesanh could well fall, with a terrible loss in American lives, prestige and morale, and this is a tragedy of our stubbornness there; but the bastion no longer is a key to the rest of the northern regions, and it is doubtful that the American forces can be defeated across the breadth of the DMZ with any substantial loss of ground. Another standoff. On the political front, past performance gives no confidence that the Vietnamese government can cope with its problems, now compounded by the attack on the cities. It may not fall, it may hold on, but it probably won’t show the dynamic qualities demanded of this young nation. Another standoff.

We have been too often disappointed by the optimism of the American leaders, both in Vietnam and Washington, to have faith any longer in the silver linings they find in the darkest clouds. They may be right, that Hanoi’s winter-spring offensive has been forced by the Communist realization that they could not win the longer war of attrition, and that the Communists hope that any success in the offensive will improve their position for eventual negotiations. It would improve their position, and it would also require our realization, that we should have had all along, that any negotiations must be that — negotiations, not the dictation of peace terms. For it seems now more certain than ever that the bloody experience of Vietnam is to end in a stalemate. This summer’s almost certain standoff will either end in real give-and-take negotiations or terrible escalation; and for every means we have to escalate, the enemy can match us, and that applies to invasion of the North, the use of nuclear weapons, or the mere commitment of one hundred, or two hundred, or three hundred thousand more American troops to the battle. And with each escalation, the world comes closer to the brink of cosmic disaster.

To say that we are closer to victory today is to believe, in the face of the evidence, the optimists who have been wrong in the past. To suggest we are on the edge of defeat is to yield to unreasonable pessimism. To say that we are mired in stalemate seems the only realistic, yet unsatisfactory, conclusion. On the off chance that military and political analysts are right, in the next few months we must test the enemy’s intentions, in case this is indeed his last big gasp before negotiations. But it is increasingly clear to this reporter that the only rational way out then will be to negotiate, not as victors, but as an honorable people who lived up to their pledge to defend democracy, and did the best they could.

This is Walter Cronkite. Good night.

Bill Marina, RIP

Revisionist historian William Marina died this morning of a heart attack. Bill was a great libertarian and friend of the late Murray Rothbard.

I encountered Bill several times in the 1970s and always enjoyed his wit and wonderful conversation.

Thanks to Gary North for this sad news. Check out Lew Rockwell’s brief obit. Gary North has a longer obit on Wednesday’s LewRockwell.com.

Check out a few of Bill’s articles:

The Anti-War March on Washington: The Real Issue Is Empire

Holding Up a Mirror to the Face of U.S. “Exceptionalism”

The Three Stooges in Iraq, and the U.S.’s First Stooge

Empires as Ages of Religious Ignorance

Here are Bill’s archives at LewRockwell.com

Bill Marina, we will miss you.

Update: Read David Beito’s post at The Beacon (Independent Institute)