Bankruptcy

The End of a Libertarian Era: Freedom Communications Selling Off in Chunks

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As Warren Buffett expands his media holdings by buying 63 small newspapers this week (shouldn't he be giving that money to the government?), a much more liberty-oriented media empire is dismantling.

R.C. Hoiles: Radical Dude

Freedom Communications Inc., founded by irascible libertarian pontificator R.C. Hoiles as Freedom Newspapers in the 1930s, announced the sale of its Midwest newspapers on Thursday and Texas newspapers today. This follows the sale of all its television stations in April as well as a few individual papers in smaller deals. Aside from the company's two metro newspapers – The Orange County Register (Calif.) and The Gazette (Colorado Springs) – the sales leave the media company with a handful of community dailies and weeklies in California, North Carolina and Florida.

Hoiles was considered radical for his time and would still be considered radical were he still alive (probably even moreso now). As Reason's Brian Doherty documented in his book, Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement (go buy it!), Hoiles was a vocal opponent of unions and forced public schooling. He believed in voluntary contributions for public services rather than coercive taxation, even for police. He was fined for violating wage control laws during World War II for giving out a raise. He also opposed the internment of Japanese-Americans during World War II and believed in open immigration.

After Hoiles' death, Freedom Communications continued to grow, remaining in the hands of family until 2004, when several family members said they wanted out of the company. Freedom connected with Blackstone Group and Providence Equity Partners to buy out these family members. Blackstone and Providence bought 40 percent of the company for about $460 million, allowing the remaining family members to stay in control of the company.

But then the housing bubble burst, the recession hit and ad sales plummeted. Freedom struggled, just like  nearly every other media company. Freedom went through forced employee furloughs and several rounds of layoffs, but by 2009 it reached a point where it was unable to make its loan payments. Working with its creditors, Freedom filed for bankruptcy and restructured. When it emerged from bankruptcy in 2010, the agreement with creditors reduced its debt from around $770 million to $325 million. But it also all but eliminated the stakes the Hoiles family (as well as Blackstone and Providence) held in the company. Its lenders and investment firms took control. The Hoiles era was over.

(Full disclosure: Up until the end of April I was the editor of the Desert Dispatch in Barstow, Calif., one of Freedom's smaller dailies. The observations that follow are from my own experiences working there for the past 10 years.)

Future uncertain

After the bankruptcy, no dictates came down from the new owners demanding any sort of changes in the newspapers' editorial positions. The only change was that the newspapers were now free to endorse candidates on their editorial pages, something that had been previously forbidden. Editorial boards could take stands on initiatives and referendums, but not actual people. There were a lot of reasons for the rule, the simplest being "politicians lie."

Before, during and after the bankruptcy, Freedom Communications had been on the market looking for buyers. It was pretty obvious that the new ownership model was not meant to be permanent. The piecemeal sale of the company does not appear to be coming as a surprise to most staff (I'm still in touch with some through social media channels).

Whether libertarian attitudes will remain prominent on the opinion page under their new owners is not yet clear. Freedom's Texas papers were sold to AIM Media Texas, a new company founded by former Dallas Morning News President Jeremy Halbriech specifically for the purchase. The Midwest papers were sold to Ohio Community Media, a collection of community newspapers that doesn't seem to have a consistent editorial view (or sometimes even any at all, at least on some newspaper websites).

It's probably safe to say there won't necessarily be an expectation of libertarian views, as there were under Freedom Communications. Editorial positions were expected to advance libertarian philosophy. Not every component of the editorial page needed to be of libertarian bent, but anybody reading the opinion pages on a regular basis should grasp the editorial writers' support of economic and personal freedom. (This ultimately resulted in me frequently being accused of clinging to every single ideology except for libertarianism.)

What's really lost is the amassing of a small chain of media outlets across the United States that was at least friendly to libertarian thought. Once a year, until financial struggles killed it off, publishers and top editors would attend a weeklong management conference. The first couple of days were nicknamed "Freedom School" and were dominated by talks by libertarian (or libertarian-leaning) luminaries whose names you see regularly at Reason.com: Jonathan Rauch, Veronique de Rugy, Andrew Napolitano. It's where I first met Steven Greenhut, who helped me make sense of California's utterly absurd Redevelopment Agency system.

But ultimately, it's only fair that if Freedom Communications were to fail, it would be at the hands of the market (insert caveat about government's role in the housing bubble/collapse here). While one avenue of expressing libertarian opinion may fade, dozens more pop up in the growing and increasingly personal new media. The arguments in favor of libertarian philosophy are at everybody's fingertips now. Traditional media may be struggling to adapt, but so too is public education: the government monopoly on the school system is crumbling. Even as Hoiles' empire may well be breathing its last, his philosophy finds new adherents.