Freedom Communications, owner of The Orange County Register, is poised to strike a highly unusual partnership with the city of Anaheim whereby the media company would be the city's broker as it pursues corporate sponsorships for its controversial transportation hub project.
News of the deal has drawn criticism from Anaheim Mayor Tom Tait and warnings from media ethics experts that the county's largest newspaper could be seen as an “agent of the government.”
Freedom Communications co-owner and Register publisher Aaron Kushner defended the arrangement as just a new twist to traditional advertising sponsorships that speaks to the media company's commitment to the region's future.
Freedom Communications would have the exclusive right for 12 months to solicit corporations for the opportunity to display their names on the Anaheim Regional Transportation Intermodal Center or ARTIC, a nearly $200-million structure that would house the city's train station, a letter of intent from the city states.
In order for the deal to be complete, the City Council must approve it.
Kushner acknowledged that the company would receive a cut of the revenue from any successful sponsorships.
"Effectively, we are acting as an additional source of marketing muscle to try and bring private support to this project, because our mission, we believe, is to help Orange County grow," Kushner said. "We believe this is an important project."
Media ethics experts reached for comment said they have never heard of such an arrangement, and that it has the potential to damage the Register newsroom's credibility as it covers the ARTIC project.
“It’s just a terrible spot to put them in,” said Al Tompkins, a senior faculty member at The Poynter Institute for Media Studies, of the journalists assigned to cover the city and the project. “And the question really does become: Are the finances of this type of deal worth the erosion of public confidence that comes with it?”
Marc Cooper, a USC journalism professor who has called foul on past Register controversies, was stunned when told of the arrangement.
“That's too unbelievable. … I would classify this as mind-boggling,” Cooper said after taking a few seconds to collect his thoughts. “It really stretches the imagination.”
On June 20, the Register published an article announcing a new naming rights broker division at its parent company and announced contracts with three entities. The article did not mention anything about a pending deal with Anaheim, even though the city's letter outlining the terms is dated June 19.
When contacted Thursday evening by a Voice of OC reporter, Kushner said that the newspaper had yet to report on the deal because "it doesn't exist yet."
Then later in the evening, the Register posted a brief article on its website outlining the proposed arrangement.
In his defense of the agreement, Kushner stressed that just as with advertisers, there will be a strict firewall between the coverage of ARTIC and the business side of the newspaper.
“We've basically at no cost — frankly as a public service — offered to help the city of Anaheim attract one or more major, including national or international, sponsors to help lower the taxpayer costs of building a great regional transportation hub,” Kushner said. “I don't think there's a single advertiser with us that we don't cover in some way.”
Tait, meanwhile, said the deal could compromise the newspaper's objectivity.
"Not only do I question the need for such an agreement, I have serious concerns about creating a financial partnership with our local newspaper, which also serves as a watchdog for the citizens over matters at City Hall,” said the mayor.
Cooper also said he disagrees with how Kushner defines public service.
"You don't become a booster of Orange County by becoming a partner with institutions of power," Cooper said. "As a newspaper you do it by making the county the most honest, most efficient, most accountable county in the country. And newspapers should be on the frontlines of that. That's the role of a newspaper — not to be a PR agent.”
This is not the first controversial business move for Kushner since he bought the Register in June 2012.
While gaining praise for adding 175 newsroom staffers and expanding its news content at a time when most newspapers have been cutting back on coverage, Kushner has been hammered by critics for other business deals and what they claim are efforts to appease the political establishment.
Voice of OC revealed in February that the Register had changed its political ad policy after two Anaheim councilwomen complained to Register co-owner Eric Spitz about ads from a local activist that criticized their votes for a controversial hotel subsidy.
In the wake of that controversy, Kushner raised eyebrows in the media industry when he told newsroom staff that journalists shouldn't abide by the long-held journalism credo of “afflicting the comfortable.”
Then in March, the Los Angeles Times revealed that the Register struck a deal whereby UC Irvine, Cal State Fullerton and Chapman University would each pay the Register $275,000 per year for the newspaper to publish weekly news sections focused on positive happenings at the colleges.
That arrangement calls for UCI's public relations department to be “content advisors, idea generators and collaborators” on the sections, according to an internal UC Irvine memo cited by the Times.
The Register’s top editor has said the university arrangement wouldn’t affect the newspaper's news coverage.
Jason Young, the activist whose ads sparked complaints from the councilwomen, was also the first to uncover the letter of intent on the sponsorship deal. He said in an interview Thursday that it is now clear why the Register responded the way it did to the pressure from the politicians.
“I knew something shady was going on, and here it is,” Young said. “Of course, the Register is going to bow down to [Anaheim Councilwomen] Kris [Murray] and Gail [Eastman] to curtail my First Amendment rights, because they wanted this deal.”
Kushner strongly disputed that contention, saying that the policy never changed. It was merely enforced after complaints about negative ads.
“Our policy has nothing to do with Anaheim," he said. "It has to do with us being a private business and whether we do or do not want to accept personal attack ads. For the record, we have run negative ads from him, so long as they are not personal attack ads.”
Cooper said that the potential business relationship creates a conflict on several levels: First, it makes the Register appear as an agent of city government, and second, the newspaper's ownership has to have comfortable relationships with its host of major corporate contacts. Also, he said, it places pressure on the reporters to offer favorable coverage of ARTIC.
Cooper also said that transportation is one of the most important local issues a newspaper can cover. Such a business partnership threatens the perception that the Register can objectively cover the transit hub, he added.
“Maybe [ARTIC] is going to be wonderful. I don't know. But I certainly won't trust The Orange County Register on it,” said Cooper.
Although the ARTIC project is still in the midst of construction, it has already proven to be highly controversial.
In 2010, the county grand jury criticized officials for committing millions of dollars to ARTIC while cutting back on bus service for poor and disabled people. A later grand jury panel supported the project.
And when then Anaheim Mayor Curt Pringle sought $200 million in funds for ARTIC from the California High-Speed Rail Authority, whose board Pringle chaired, the move was criticized for being set for a vote without any public hearings or application process to determine that it was the best use of public funds.
That ultimately sparked an investigation by the California attorney general's office, which found that Pringle had a conflict of interest in serving both as Anaheim’s mayor and chairman of the rail authority.
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