TV Veteran Steps Into Newspaper Family Drama

In 1970, Alan J. Bell got his first big professional break when he became general manager of WJZ-TV in Baltimore, then an ABC affiliate. Discouraged by the shape he found the station in, Bell complained to his mother that he had inherited a mess.

“You jerk,” Bell, laughing, remembers her firing back. “If there were no messes, you wouldn’t have a job.”

Bell said he then turned the station around and boosted ratings. He went on to hold several important broadcasting positions ranging from president of Lorimar Broadcast Group, a unit of Lorimar, the producer of such TV shows as “Dallas” and “Falcon Crest,” to assistant general manager of KTTV-TV Channel 11 in Los Angeles. Now, the Boston native and Harvard graduate faces what might be the biggest challenge in his 70 years.

Bell last week was named the new chief executive of Freedom Communications Inc., the Irvine-based parent of the Orange County Register. He takes over a family-owned company beset by infighting and schisms.

Bell assumed the top spot after his predecessor, Samuel Wolgemuth, resigned under pressure from the Hoiles family, owner of the closely held company. Shareholders had blamed Wolgemuth for millions of dollars of losses related to failed magazine ventures.

A “TV guy through and through,” in the words of former Freedom Chief Operating Officer Joseph Barletta, Bell now leads the nation’s 12th-largest newspaper company. In addition to 28 daily newspapers, Freedom owns 37 weeklies and eight television stations.

Before being named to his new job, Bell oversaw the TV stations as president of Freedom’s broadcasting division. Despite his lack of print background, Barletta and others call Bell a quick learner and predict success. They also say that his 13 years at Freedom have prepared him for the job.

CBS Chief Executive Leslie Moonves, a former colleague at Lorimar, said Bell has the ability to bring people together--an invaluable skill in his new job. “He knows how to get the troops pointed in the right direction,” he said.

But some experts speculate that Freedom’s board might have tapped Bell to dress up the company’s television stations in preparation for a sale. Media analyst John Morton said Freedom probably would sell off its TV assets, if it decides to sell anything.

Given the company’s debt, estimated by company insiders at $400 million, Morton thinks it’s unlikely Bell will go on a major shopping spree any time soon.

In an interview Monday, Bell said no decisions had been made about how to restructure the company and that he was not hired to sell off the three ABC and five CBS affiliates.

“I wasn’t brought on to sell any assets at this point,” he said.

Given his deep roots in television, the challenge of running a newspaper company would be daunting enough. However, Bell is stepping into a squabble among Hoiles shareholders that threatens to tear apart both the company and the family.

Unhappy with their modest returns, several shareholders have said they want to sell some of their holdings. Board member Tim Hoiles, a grandson of founder Raymond Cyrus Hoiles and an 8.6% owner, said Monday that “parts of the business, especially the Orange County Register, are under-performing and have been for 20 years. Many people want out.”

A standard bearer of libertarianism and Freedom’s crown jewel, the Register is believed to have an operating profit margin of less than 15%. That contrasts with an average operating margin of more than 21% at the nation’s publicly traded newspaper companies.

The paper’s circulation has dropped by 8% in two years to about 315,000. The fall is attributed to a reduction in door-to-door promotional visits and because the Register is no longer delivered to homes outside Orange County, spokeswoman Nancy Souza said.

Bell said he hoped to improve the paper’s financial situation.

“It’s no secret we need to make the Register more efficient and its margins better,” he said.

After a disappointing 2001 in which Freedom lost $110 million before taxes largely because of magazine and Internet operations, the company is regaining ground.

In the first six months, Freedom posted a pretax profit of $23 million, compared with a $55-million loss in the same period a year earlier.

The ire of dissident shareholders such as Tim Hoiles notwithstanding, the appointment of Bell, who joined Freedom in 1989, appears to have cooled passions among directors and shareholders, said a board member who asked not to be identified.

Because he is a “known commodity” who enjoys widespread respect, the board member said, Bell would be given the chance to oversee a transfer of ownership from third-generation shareholders such as Tim Hoiles to fourth-generation members, now in their 20s and 30s. Some question whether the Young Turks will succeed in finding a way to buy out their elders short of selling off big chunks of Freedom.

Bell said the company’s owners would decide how to restructure it. He also said he would serve for as long as they wanted him to, although a change in Freedom’s “capital structure” possibly could affect his position.

Media analyst Morton said he doubted Bell would preside over the dismantling of Freedom’s newspaper empire. “Owning a newspaper isn’t like owning a green bean cannery,” said Morton, who believes that Freedom could fetch $1.5 billion to $2 billion on the open market. “There’s a deep emotional connection to it.”

Larry Pryor, an assistant professor of journalism at the USC Annenberg School for Communication, said that it was impossible to divine the company’s fate because even the Hoileses are undecided. If they choose to ready the entire business for sale, though, he would expect them to cut production costs, lay off employees and even shrink the size of the paper to boost profit and make it more attractive to potential suitors.

In the long run, Pryor said, he thinks Freedom could break apart under the stress of dissident shareholders, as have other family-owned newspaper companies.

That’s largely what happened at Los Angeles Times parent Times Mirror Co., which Tribune Co. bought two years ago from the Chandlers, Pryor said. A similar scenario played out more than a decade earlier with the Louisville Courier Journal, he added.

“If I were looking at the tea leaves, yes, I’d say this is the end of family-owned” Freedom, Pryor said.