Los Angeles Times deal is target of federal anti-trust suit

The Los Angeles Times’ bid to become the sole newspaper in Southern California has run into resistance from the Justice Department.

On Thursday, the Department of Justice filed an antitrust suit to block Tribune Publishing, the Times’ owner, from acquiring Freedom Communications Inc., publisher of the Orange County Register and the Riverside Press-Enterprise.

The department says the acquisition would give Tribune a monopoly over Southern California, because the Times and Register account for 98% of newspaper sales in Orange County, and the Times, Register and Press-Enterprise account for 81% of English-language newspaper sales in Riverside County.

“If this acquisition is allowed to proceed, newspaper competition will be eliminated and readers and advertisers in Orange and Riverside Counties will suffer,” Bill Baer, the Assistant Attorney General for the Justice Department’s Antitrust Division, said in a statement. “Newspapers continue to play an important role in the dissemination of news and information to readers and remain an important vehicle for advertisers. The Antitrust Division is committed to ensuring that competition in this important industry is protected.”

Tribune Publishing has been pursuing the Freedom Communications acquisition since early last year.

Despite the Justice Department’s suit, regional consolidation may well be the future of the newspaper industry, given the financial hardship that has beset local newspapers.

It’s also not clear what future the Register and Press-Enterprise would have if Tribune is blocked from following through on its acquisition. Two other companies were vying for the papers, including Digital First Media, which owns The Los Angeles Daily News and eight other regional newspapers.

Tribune will continue to seek bankruptcy court approval of its acquisition on March 21, the Justice Department said.

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