Freedom Communications announced that it notified the administrative agent for its senior credit facility that it believes it may not be in compliance with formula-based financial covenants for the fiscal quarter ended September 30, 2008, which requires the maintenance of certain specified ratios. The Company is in active discussions with its lenders and intends to work closely with them to address the current situation.

The Company has and generates sufficient cash to meet its working capital requirements. In addition, in response to the uncertainty in the financial markets several weeks ago, Freedom Communications determined it was prudent to draw down on the balance of its revolving line of credit.

In addition to sustained weakness in newspaper and broadcast advertising and increased competition for advertising revenue from online media, the Company’s businesses have been negatively affected by newspaper circulation declines, the recent economic slowdown, and vulnerability to markets feeling the real estate collapse, which make up a significant portion of revenues.

The Company said that while it has made considerable progress in transforming its business over the past several months, including streamlining its cost model and making it more dependent on variable costs, it will also continue to examine other strategic alternatives. As part of these efforts, the Company also said that it will be realigning the structure of its Mesa, Arizona newspaper, East Valley Tribune.

“The initiatives we have undertaken were designed to strengthen our business, better position our publications to compete for advertising revenues, and right size the cost structure of the business. Deleveraging our balance sheet to better reflect current revenue streams will be another important step in our Company’s transformation,” said Scott Flanders, President and CEO.

Freedom Communications has implemented a number of initiatives, including:

• Re-aligning the organization to focus on its core competencies of selling local advertising and creating local content
• Improving management of newsprint and ink consumption
• Consolidating, regionalizing or outsourcing non-core functions to achieve synergies and lower fixed costs
• Continuing investment in Interactive utilizing dollars captured from efficiencies and synergies created by streamlining processes.

“By continuing to take important steps to transform the Company’s business, we are optimistic that we are creating a sustainable business model that allows us to continue serving our communities for many more years to come,” Mr. Flanders concluded.