En route to bankruptcy, Freedom execs pocketed $2.6M in bonuses

By Nick R. Martin | November 5th, 2009 | 2:33 am | 53 Comments »


Julie Moreno


Jonathan Segal

When Freedom Communications executives Jonathan Segal and Julie Moreno announced Monday the company would be shutting down the East Valley Tribune newspaper at the end of the year, they told staffers it was due, in part, to the bad economic state of the news industry. Freedom was under bankruptcy protection, the Tribune was losing money and the company just didn’t have the wherewithal to keep the Mesa newspaper afloat.

What Segal and Moreno did not say, however, was that behind the scenes of their company’s decline, the two of them continued to do very well financially thanks to hefty bonuses given out to executives this year by Freedom Communications.

In fact, documents filed Oct. 24 in federal court in Delaware show that bonus payments as high as $775,000 were widespread within Freedom’s top ranks as the media chain barreled toward bankruptcy. In all, 19 of the company’s top officers pocketed a combined $2.6 million in the first eight months of 2009 alone.

All the while, those who took the extra cash continued to lay off workers or slash pay at most of Freedom’s 100-plus news outlets nationwide. As consolation, the executives told employees their decisions were difficult and not made lightly.

Freedom spokeswoman Maya Pogoda said Wednesday that none of the company’s executives were willing talk about the bonuses. She also declined to answer questions about what merited the rewards in the first place.

“The company doesn’t have any comment beyond what has already been filed in court,” Pogoda said.

The court documents provide a startling picture of a company that knew it was in dire straits financially, yet continued to pay handsome rewards to its leadership anyway. The records show that many of the payments came just days before the company made major announcements regarding its financial decline.

For example, on Aug. 14 – two weeks before it filed for federal bankruptcy protection awash in more than $1 billion in debt – Freedom handed out more than $825,000 in bonuses to 13 executives. That included a payment of $400,000 to former CEO Scott Flanders, who left the company months beforehand to take over the adult entertainment company Playboy Enterprises.

In another example, on March 13, Moreno, a Freedom vice president and the publisher of the East Valley Tribune, took $28,333 in extra pay. She did so seven days before she told staffers at the newspaper they would be forced to take a week off without pay as a “preemptive strike” to prevent future layoffs.

The March bonus capped off $65,456 in total extra pay for Moreno, who already was being paid a salary of about $190,000. Her bonuses all came within three months of the January layoffs of about 140 people from her newspaper. As she did on Monday, Moreno at the time blamed the layoffs on the failing financial state of the industry.

And indeed, Freedom’s news outlets were failing fast. The same documents that detailed the executive rewards also showed just how badly the California media company and its news outlets have been sliding the past few years.

Freedom said in other documents filed Saturday the East Valley Tribune has been unprofitable for two years.

Those were the only two years in which Moreno was publisher of the newspaper. She took over on Sept. 1, 2007 after being promoted from the same post at the Yuma Sun.

So after two years of running a failing newspaper, what exactly earned Moreno the $68,456 in bonus payments? Her employees may never know. She did not return multiple calls for comment this week.

Update (Nov. 6, 3:30p): As one commenter pointed out, the revenues that Freedom Communications reported for the past three years don’t quite make sense. (No, I did not confuse the numbers for quarterly revenue.) So I’ve pulled them out of the story along with the graphics. The Orange County Register is also reporting that the government is questioning some of the numbers Freedom has released during this process. We know Freedom is in bad shape, but the revenue numbers they released Oct. 24 are questionable.

Update (Nov. 6, 4:42p): You asked for it. “Freedom Bonus Central” is now live with all the information Heat City has collected on the executive bonuses. See who got paid while cutting employee pay.

[Disclosure: I'm a former Tribune staffer and was among those laid off in January.]


  • SS

    ASTOUNDING. I still have a job with Freedom and took a 7 percent pay cut this year (5 percent pay reduction, 2 percent cut in the form of a furlough) and no pay raise. Lost my 401k contribution.

    Thanks, a**holes. For sinking the company and slicing chunks of the hide off as the beast collapsed.

  • SS

    ASTOUNDING. I still have a job with Freedom and took a 7 percent pay cut this year (5 percent pay reduction, 2 percent cut in the form of a furlough) and no pay raise. Lost my 401k contribution.

    Thanks, a**holes. For sinking the company and slicing chunks of the hide off as the beast collapsed.

  • Name

    Nick: How about posting the relevant bankruptcy documents so that we can all see how much each exec received?

  • Name

    Nick: How about posting the relevant bankruptcy documents so that we can all see how much each exec received?

  • http://www.heatcity.org Nick R. Martin

    It’s a good idea. I’ll do that when I’m back at my computer. I also want to put together a chart or graphic showing the payments.

  • http://www.heatcity.org Nick R. Martin

    It's a good idea. I'll do that when I'm back at my computer. I also want to put together a chart or graphic showing the payments.

  • test1

    Please post Olaf Frandsen’s bonus! This former Monitor employee would love to know.

  • test1

    Please post Olaf Frandsen's bonus! This former Monitor employee would love to know.

  • Anonymous

    First off, excellent reporting by Nick Martin. Great job with the Web site Nick – may of us are proud of you!

    As for the story itself, it is not a surprise at all. Jonathan Segal is an incompetent crook who has done nothing but destroy a major media company with personal greed and backfiring strategies.

    Moreno is a mere greedy shill for Segal, and was a suspect hire to begin with. How does somebody go from leading a small-time paper in Yuma to a mid-major daily like the Tribune unless she’s in bed with her boss, Segal?

    The Tribune employees who will have to ride out the final two months there should boycott Segal, Moreno and anybody else in upper management who has prospered from this illegal money grabbing.

    Hopefully the bankruptcy courts will order these execs to forfeit their bonuses.

    But regardless, this much is certain: Segal, Moreno and anyone else tied to their slimy schemes at Freedom, and the Tribune, will walk away form this company with tarnished resumes and reputations, and will never work again for a credible entity.

  • formertribber

    First off, excellent reporting by Nick Martin. Great job with the Web site Nick – may of us are proud of you!

    As for the story itself, it is not a surprise at all. Jonathan Segal is an incompetent crook who has done nothing but destroy a major media company with personal greed and backfiring strategies.

    Moreno is a mere greedy shill for Segal, and was a suspect hire to begin with. How does somebody go from leading a small-time paper in Yuma to a mid-major daily like the Tribune unless she's in bed with her boss, Segal?

    The Tribune employees who will have to ride out the final two months there should boycott Segal, Moreno and anybody else in upper management who has prospered from this illegal money grabbing.

    Hopefully the bankruptcy courts will order these execs to forfeit their bonuses.

    But regardless, this much is certain: Segal, Moreno and anyone else tied to their slimy schemes at Freedom, and the Tribune, will walk away form this company with tarnished resumes and reputations, and will never work again for a credible entity.

  • Name

    These numbers don’t make sense–I think you’ve confused quarterly numbers and annual figures. Otherwise, your article would indicate that the East Valley Tribune makes up 25% of Freedom’s annual revenue (at least in 2007). No way. Also, Freedom could never have borrowed nearly a billion on net income of around $27 million (assuming a 20% profit margin) in 2007.

    Additionally, I believe the decline from $70 million is for the ENTIRE Arizona unit, not just the East Valley paper, which has never had a circulation large enough to generate that much revenue on its own.

    Please double check your numbers as this just doesn’t add up.

  • Name

    These numbers don't make sense–I think you've confused quarterly numbers and annual figures. Otherwise, your article would indicate that the East Valley Tribune makes up 25% of Freedom's annual revenue (at least in 2007). No way. Also, Freedom could never have borrowed nearly a billion on net income of around $27 million (assuming a 20% profit margin) in 2007.

    Additionally, I believe the decline from $70 million is for the ENTIRE Arizona unit, not just the East Valley paper, which has never had a circulation large enough to generate that much revenue on its own.

    Please double check your numbers as this just doesn't add up.

  • Anonymous

    Also, it would be interesting to learn about what kind of package former Executive Editor Jim Ripley received at the end of last year when he “retired” at the same time most of the Tribune employees were let go.

    Furthermore, I wonder if there’s a way to tell if any other Tribune Executive Council members or managing editors have received bonuses or attractive severance packages in the past year? Are those details laid out in the bankruptcy filings?

  • formertribber

    Also, it would be interesting to learn about what kind of package former Executive Editor Jim Ripley received at the end of last year when he “retired” at the same time most of the Tribune employees were let go.

    Furthermore, I wonder if there's a way to tell if any other Tribune Executive Council members or managing editors have received bonuses or attractive severance packages in the past year? Are those details laid out in the bankruptcy filings?

  • Name

    “With annual revenue of about $700 million, Freedom owns the Orange County Register and more than 30 other daily papers and eight TV stations. Freedom has been majority owned for more than 70 years by the Hoiles family.”

    http://online.wsj.com/article/BT-CO-20090901-711480.html

  • Name

    “With annual revenue of about $700 million, Freedom owns the Orange County Register and more than 30 other daily papers and eight TV stations. Freedom has been majority owned for more than 70 years by the Hoiles family.”

    http://online.wsj.com/article/BT-CO-20090901-71…

  • Anonymous

    It’s amazing to me that the people who got us in this mess still have jobs and even got a bonus! It gets better yet! The same clowns are still going to be in charge of running the rest of the Freedom papers in the Phoenix area! The good ole boys club wins again!

  • cheeksca

    It's amazing to me that the people who got us in this mess still have jobs and even got a bonus! It gets better yet! The same clowns are still going to be in charge of running the rest of the Freedom papers in the Phoenix area! The good ole boys club wins again!

  • Anonymous

    Is Julie Moreno going to take her doomed employees out for a farewell lunch, and pick up the tab with her bonus money?

  • formertribber

    Is Julie Moreno going to take her doomed employees out for a farewell lunch, and pick up the tab with her bonus money?

  • Anonymous

    Nick — Thanks so much for the news! I got a kick when I saw it was you who wrote this. Keep up the good work!

  • Anonymous

    Nick — Thanks so much for the news! I got a kick when I saw it was you who wrote this. Keep up the good work!

  • Anonymous

    Thanks so much for reporting this — Freedom’s questionable business practices really needed to be revealed.

  • Anonymous

    Thanks so much for reporting this — Freedom’s questionable business practices really needed to be revealed.

  • Guest

    I I am a current Tribune employee and received a restructuring memo Thursday afternoon that leadership of all valley newspaper products will be under Jason Joseph and editorial for them lead by Dan McCarthy. I particularly liked the wording that Julie wanted to thank Renie Scibona & Brian Johnson for their efforts in Ahwatukee, they will be assisting in smooth transition and to wish them best of luck in future endeavors. In other words – they, too, were let go. A current sales person/mgr from EVT will oversee sales in Ahwatukee (not in memo, but spilled by VP Advertising Rob Forcey). Any word on what’s happening with Forcey or Interactive Director Rick Flowers? I’m sure they are both staying on with Freedom.

  • http://www.heatcity.org Nick R. Martin

    @Name You’re right, the numbers don’t add up, do they? I went back and checked, and Freedom listed those figures as the annual revenues for these companies. I did not confuse them with quarterly revenue, however I’m skeptical enough about their figures that I’ve taken them out of the story. I’ve noted the info in an update above. Thanks for the comments.

  • http://www.heatcity.org Nick R. Martin

    @Name You’re right, the numbers don’t add up, do they? I went back and checked, and Freedom listed those figures as the annual revenues for these companies. I did not confuse them with quarterly revenue, however I’m skeptical enough about their figures that I’ve taken them out of the story. I’ve noted the info in an update above. Thanks for the comments.

  • http://www.heatcity.org Nick R. Martin

    Some of you have asked for the raw data for the bonuses. I have now created “Freedom Bonus Central” with all the information Heat City has collected so af. See who got paid while cutting employee pay.

  • http://www.heatcity.org Nick R. Martin

    Some of you have asked for the raw data for the bonuses. I have now created “Freedom Bonus Central” with all the information Heat City has collected so af. See who got paid while cutting employee pay.

  • Catherine

    Like I always tell my kids: Never trust management.

  • Catherine

    Like I always tell my kids: Never trust management.

  • Anonymous

    To all Freedom slaves (ox⋅y⋅mo⋅ron)

    Secession, just do it! The equipment must be worth something? : )

    Former Grunt

  • communitypaperboy

    To all Freedom slaves (ox⋅y⋅mo⋅ron)

    Secession, just do it! The equipment must be worth something? : )

    Former Grunt

  • Anonymous

    Secession!

    Cross the street and compete. The equipment where you work must be worth something? : ) Hey Freedom, here’s your non-compete. No doubt the responders here are news people like myself. We bleed ink. Too bad we can’t feed ink to the Freedom execs.

    former Grunt

  • communitypaperboy

    Secession!

    Cross the street and compete. The equipment where you work must be worth something? : ) Hey Freedom, here's your non-compete. No doubt the responders here are news people like myself. We bleed ink. Too bad we can't feed ink to the Freedom execs.

    former Grunt

  • http://23kazoos.com/ wendy kenney @23Kazoos

    Nick, if you did a survey of all of the major corporations in the Phoenix metro area, you would see that this practice is widespread in the good old boy network.

  • http://23kazoos.com/ wendy kenney @23Kazoos

    Nick, if you did a survey of all of the major corporations in the Phoenix metro area, you would see that this practice is widespread in the good old boy network.

  • Larry Offner

    Greed is God. How much is enough? More. The mantra of 21st century corporatism.

  • Larry Offner

    Greed is God. How much is enough? More. The mantra of 21st century corporatism.

  • Name

    I guess its easy standing up and telling people that they no longer have a job when you have just pocketed their salaries. Company execs are going to burn in hell for the way they have treated people. Benefit enrollment is coming up and the prices have went up so we have lost more than 5%, NICE JOB EXECS you really know how to SCREW employees while you are laughing all the way to the bank. Bonuses are for people who do GREAT jobs, but once again this is the Freedom way, they never did think like most corporations. Its coming up on yr end, I betcha your all going to get another one, while most of us little people are scraping to get by and buy Christmas. I sure hope you can sleep at night…..

  • Name

    I guess its easy standing up and telling people that they no longer have a job when you have just pocketed their salaries. Company execs are going to burn in hell for the way they have treated people. Benefit enrollment is coming up and the prices have went up so we have lost more than 5%, NICE JOB EXECS you really know how to SCREW employees while you are laughing all the way to the bank. Bonuses are for people who do GREAT jobs, but once again this is the Freedom way, they never did think like most corporations. Its coming up on yr end, I betcha your all going to get another one, while most of us little people are scraping to get by and buy Christmas. I sure hope you can sleep at night…..

  • Anonymous

    That’s just what is happening in Yuma.
    A new magazine is kicking serious Freedom butt. All the sales reps have to say is “I’m not with The Sun.” and they get clients. Seriously. They only have to be moral, ethical and true to their clients and just wait for the (Yuma) Sun to set.
    The goal is to become Yuma’s news weekly magazine and it’s happening fast.

    Oh, and as far as covenants of non-competition; talk to an attorney. Courts are more in favor of the individual right to work unless there is good cause to enforce a non-compete. Entry level employees don’t have proprietary info so what’s the harm in allowing them to work elsewhere or start their own company?
    A recent version said the employee could not work for a similar business “within the area they provided services.” Not the subscription area. Not a set mile radius. Employees provide services in a 10′x10′ cubicle. Unless you work for the competition within that cubicle there’s no conflict.
    So die with a little dignity, Freedom. If you have any left.

  • FreeofFreedom

    That's just what is happening in Yuma.
    A new magazine is kicking serious Freedom butt. All the sales reps have to say is “I'm not with The Sun.” and they get clients. Seriously. They only have to be moral, ethical and true to their clients and just wait for the (Yuma) Sun to set.
    The goal is to become Yuma's news weekly magazine and it's happening fast.

    Oh, and as far as covenants of non-competition; talk to an attorney. Courts are more in favor of the individual right to work unless there is good cause to enforce a non-compete. Entry level employees don't have proprietary info so what's the harm in allowing them to work elsewhere or start their own company?
    A recent version said the employee could not work for a similar business “within the area they provided services.” Not the subscription area. Not a set mile radius. Employees provide services in a 10'x10' cubicle. Unless you work for the competition within that cubicle there's no conflict.
    So die with a little dignity, Freedom. If you have any left.

  • Cheeks

    More than likely Roberta will go to Ahwatukee along with Rick but Forcey will go back to Ohio to his nice corporate job. =) Nice to know somethings never change.

  • Cheeks

    More than likely Roberta will go to Ahwatukee along with Rick but Forcey will go back to Ohio to his nice corporate job. =) Nice to know somethings never change.

  • Cheeks

    It’s not just in the Phoenix Area! It’s all over!

  • Cheeks

    It's not just in the Phoenix Area! It's all over!

  • Anonymous

    I knew Segal when he was stumbling around in North Carolina, where he lacked the guts to enforce company edicts handed down from on high. From his earliest days, when he grinned his way through New Bern, to his tenure in Gastonia, Segal proved that he was a mere lightweight.
    An old North Carolina legislator remembered Segal in the news executives’ brief period of getting “real experience” as a reporter. The young reporter, said the old pol, frequently made mistakes and never understood the legislative process. “He was in over his head, even then,” the old lawmaker said. ‘
    Time has done nothing to change that.

  • Anonymous

    I knew Segal when he was stumbling around in North Carolina, where he lacked the guts to enforce company edicts handed down from on high. From his earliest days, when he grinned his way through New Bern, to his tenure in Gastonia, Segal proved that he was a mere lightweight.
    An old North Carolina legislator remembered Segal in the news executives’ brief period of getting “real experience” as a reporter. The young reporter, said the old pol, frequently made mistakes and never understood the legislative process. “He was in over his head, even then,” the old lawmaker said. ‘
    Time has done nothing to change that.

  • tarheelreporter

    I knew Segal when he was stumbling around in North Carolina, where he lacked the guts to enforce company edicts handed down from on high. From his earliest days, when he grinned his way through New Bern, to his tenure in Gastonia, Segal proved that he was a mere lightweight.
    An old North Carolina legislator remembered Segal in the news executives' brief period of getting “real experience” as a reporter. The young reporter, said the old pol, frequently made mistakes and never understood the legislative process. “He was in over his head, even then,” the old lawmaker said. '
    Time has done nothing to change that.

  • http://www.heatcity.org/2010/05/blacklisted-new-e-v-tribune-owner-will-talk-to-anyone-except-heat-city.html Blacklisted! New E.V. Tribune owner will talk to anyone except Heat City | Heat City

    [...] publisher Julie Moreno, as well as numerous other Freedom Communications executives, pocketed huge financial bonuses leading up to the company’s bankruptcy. The site later reported extensively on the massive [...]

  • Paulm5545

    Any recent revelations regarding management salaries, bonuses, etc.?

  • questionablefaith252

    Segal lives in New Bern now in river bend nc just finished building his 6million dollar home with his 10 car garage. Wow to the knowledge of where his money came from