The gloves are off between the Los Angeles Times and Orange County Register owner Aaron Kushner over him owing them millions of dollars for distributing his paper--and it looks like it just might end up in court.
As we reported in September, the Times decided to stop distributing the now-defunctLos Angeles Register and the OC edition because of the unpaid bills. The subsequent new carriers caused chaos in OC this past weekend, with tens of thousands of phone calls, hundreds of angry Facebook posts, and untold emails. Today, in response to a Weekly query about the tussle, the Times spelled out in exacting detail their claims against Kushner: that he owes them at least $3.5 million in unpaid bills, that the Kush is violating the contract that he had with the Times by having the Register distributed by another carrier, and that they want their money--or else.
What finally pushed the Times to this extraordinary measure? Sources point to new publisher Austin Beutner, who just took his position in August. They say that Beutner looked at the financials, looked at the fact the Times was essentially aiding a rival who had designs on LA, and got mad. He ordered his underlings to collect on Kushner's bills--pronto.
Beutner was unavailable for comment, and a Times spokesperson said they could not comment beyond what the below statement says when I asked if they were going to sue Kushner, as my sources tell me (gracias, sources!). So let's turn the mic over to the statement, attributed to the Times
Los Angeles Times Statement Regarding Distribution Agreement with OCR
The current situation is the direct result of the actions of the Orange County Register.
The Los Angeles Times has distributed the Orange County Register since 2009 and has done a good job, consistently earning performance incentives for its work. But OCR has, for more than a year and a half, been consistently late in paying money it owes The Times for services rendered.
OCR owes The Times more than $3.5 million plus additional sums for the remainder of the contract. The Times intends to pursue all remedies to receive the monies it is owed.
- In April 2013, OCR first missed a payment deadline under its agreement with The Times.
- By February 2014, the outstanding amount past due had grown to almost $2 million and, by mid-May, the past due amount was more than $2.5 million.
- In late May, OCR agreed to a payment plan with The Times whereby OCR would pay down past due amounts.
- In June, OCR made one payment on the plan. Since then, it has made no further payments on the plan.
- Despite OCR's failure to pay, The Times has throughout continued to perform services for OCR in a timely and effective manner and has complied with the contract.
- In September, The Times formally notified OCR it was in default and had 30 days to remedy its default and pay The Times the money owed.
- Later in September, OCR began taking out ads seeking new carriers.
- On October 4, OCR unilaterally chose to begin using alternative vendors to distribute the Orange County Register to customers, even though it had no right to do so and despite the continued willingness by The Times to serve these customers. The contract between OCR and The Times provided for The Times to be the exclusive distributor of the OCR through January 24, 2015. Any OCR customers' inconvenience is due to the actions of OCR.
- On October 6, The Times notified OCR it was terminating the agreement pursuant to its terms because OCR failed to pay The Times amounts owed.
- The issues at OCR will have no impact on Los Angeles Times subscribers in Orange County as they will continue to have their paper delivered by the same organization, which has served them well.
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More--much more--as this story develops.