Heat City

The owner of the East Valley Tribune said Thursday it wants to cash out of the newspaper business in Phoenix, putting the scrappy Pulitzer winner and its sister papers up for sale at an undisclosed price.

Freedom Communications, the California-based media chain that owns the Tribune and numerous small papers in the state, is in the early stages of Chapter 11 bankruptcy. The company is trying to figure out what to do with its nearly-$1 billion debt, and part of the solution appears to be selling off some papers for hard cash.

The company on Thursday asked a federal judge overseeing the bankruptcy for permission to hire an outside firm to help unload its metro Phoenix newspapers.

Beyond the Tribune, Freedom’s papers in the area include the Ahwatukee Foothills News, the Sun City Daily News-Sun and the Today newspapers in Glendale, Peoria and Surprise.

Tribune publisher Julie Moreno sent a memo to her staff the same day, letting them know the situation is fluid.

“I know you all have a lot of questions about what this means for the future,” Moreno wrote in the memo obtained by Heat City, “but it is just too early in the process to address them. I received this information just this morning, and don’t have more than this to share at this time.”

In the court filing, Freedom said it wanted to hire Dirks, Van Essen & Murray, a New Mexico firm that specializes in newspaper mergers and acquisitions, to help the company find a buyer.

DV&M deals largely in small to mid-sized newspapers, but it has worked with some of the nation’s largest media chains, including Gannett and E.W. Scripps. More recently, the firm helped the Seattle Times Co. sell a raft of newspapers in Maine to a local buyer.

The court filing did not say anything about the asking price for the Phoenix-area newspapers, only mentioning that DV&M would get no more than 5 percent cut of the sale.

In a story posted on the Tribune website, Moreno promised that the the day-to-day running of the newspaper would not change while it is on the block.

The Tribune has had a roller-coaster year as part of one of the worst financial eras in the history of the newspaper industry.

In January, the paper laid off 40 percent of its staff — more than 140 people. (Full disclosure: I was among the cuts.) The newspaper also ceased printing a daily newspaper, opting to publish just four days a week in print. Soon after, it dropped another day of publication, leaving it at three days a week.

In April, the paper received the highest honor in its history, being named the winner of the Pulitzer Prize for local reporting. The Tribune won for an investigation into the Maricopa County Sheriff’s Office, which was published last year.

Two months later, employees at the Tribune and every other Freedom-owned outlet were given a five percent pay cut as the company predicted the newspaper market would “remain weak for many months to come.”

Then earlier this month, on Sept. 1, Freedom declared bankruptcy, saying it was in no position to continue paying off its massive debt. The company is now in negotiations with its creditors to figure out what to do about the money it owes.