Buyer in New League With Deal for Register

MEDIA: Principal’s track record points to significant step up

By Kari Hamanaka Saturday, June 16, 2012


Clues from Aaron Kushner’s past business ventures shed some light on how he went from a relative unknown in the media industry to a deal to buy the Orange County Register and its Irvine-based parent.

Kushner heads Boston-based 2100 Trust LLC, the privately held firm that agreed to buy Freedom Communications Holdings Inc. last week. The sale includes six other newspapers and various specialty publications and websites.

It appears to be significantly bigger than any prior deals Kushner has undertaken.

A sale price was not disclosed, but Freedom likely got $200 to $230 million, according to Kevin Kamen, who owns Kamen & Co. Group Services in New York and has 32 years experience as a newspaper appraiser, broker and consultant. Kamen did not work on the deal.

2100 Trust’s management includes Kushner and a consortium of former media executives including one-time Minneapolis Star-Tribune Publisher Chris Harte and Jack Griffin, a former chief executive of Time Inc.

The rest of 2100 Trust and any of its backers remain a mystery.

“He has some support behind him—he has other investors,” Kamen said. “In order to make a deal these days, you have to borrow and you have to be able to make money using other people’s money.”

Neither Kushner nor 2100 Trust could be reached for comment last week.

Register’s Value

Kamen estimated that the Register accounted for about $150 million of the price for Freedom.

That’s higher than industry reports on the recent sale of the U-T San Diego, which reportedly went for about $110 million late last year and operates in a market similar to the Register. The publication has a daily circulation for its print edition of about 220,000 compared to 161,000 for the Register.

Kamen’s higher estimate on the Register has some underpinnings in recent activity in the marketplace.

Warren Buffet’s Berkshire Hathaway Inc. just completed an estimated $200 million acquisition of its hometown Omaha World-Herald Co., which offers a ready benchmark on the Register and Freedom. The company operates the main daily newspaper in Omaha, which has circulation of about 131,000, along with six smaller publications.

Berkshire Hathaway isn’t new to the business. It has owned the Buffalo News for some time and is a longstanding shareholder in the Washington Post Co. And it’s struck other deals in recent weeks, including an agreement to pay $142 million deal for 63 relatively small daily and weekly publications owned by Media General Inc.


U-T San Diego owner Manchester might have given Kushner’s group an unwitting assist on its bid to buy Freedom. Manchester had been identified as a bidder for the Register, with indications that a deal was imminent as recently as a few weeks ago. Various sources indicate that Manchester was only interested in the Register, and was aiming to get the paper for less than $100 million.

Then came 2100 Trust’s offer to buy all of Freedom’s remaining newspapers—the company got $385 million for its eight TV stations last year and sold several groups of newspapers around the U.S. in the months prior to its final deal.

Kushner’s Background

Kushner, reportedly still in his 30s, briefly worked for The Boston Consulting Group before launching Internet startup in 1996. The website allowed people to change their addresses online.

The company was sold for an undisclosed amount in 1999 to Massachusetts marketing services company Imagitas Inc., which was later acquired by Connecticut-based Pitney Bowes Inc.

Kushner stayed with Imagitas for two years before moving on to the greeting cards business. The industry wasn’t altogether unknown to Kushner, whose great grandfather launched Georgia-based greeting card publisher American Artists Group.

Kushner led a 2001 leveraged buyout of Massachusetts-based boutique greeting card company Marian Heath Greeting Cards LLC. He joined with business partner Dan Steever to raise what Kushner told the Wall Street Journal in 2006 was “a small portion of the price with our own and friends’ money, but clearly [we] we’re going to need an equity partner.”

The rest of the financing to get the deal done, according to the Wall Street Journal report, was through senior and mezzanine lenders in addition to Cincinnati-based Walnut Investment Partners LP.


It is unclear how much Kushner and the other investors paid for Marian Heath. Walnut Group put up $2.5 million in financing for the deal and saw the total rise to $4 million in 2006, good for control of the company with a 40% stake.

Kushner was chief executive of Marian Heath for seven years, and oversaw the acquisition of competitor Renaissance Greeting Cards Inc., based in Wisconsin at the time, through another leveraged buyout in December 2005.

Kushner’s turn toward newspapers has been several years in the making. 2100 Trust tried to acquire the Boston Globe for about $200 million. The plan was derailed when the Globe’s owner, the New York Times Co. pulled the newspaper off the market.

Industry veteran Kamen said he expects 2100 Trust to pursue more deals.

“If somebody’s going to make an investment like this, they have to be thinking, ‘OK, let’s look at the entire region,’” Kamen said.