O.C. Register Drops 8 of Its 27 Dealers : Distribution: Many of the independent workers, some of whom paid $100,000 to $130,000 for the routes, are angered by the newspaper’s move.

Independent dealers who place the Orange County Register in stores and outdoor racks are being dropped by the newspaper without compensation as part of a plan to take all distribution in-house.

The move has angered many of the 27 dealers, some of whom paid $100,000 to $130,000 each in the last 18 months for the distribution routes. They claim their investments, including thousands of dollars for warehouse rent and vehicles, are being wiped out.

The Register originally gave away without charge its distribution rights to the independent dealers and is not willing to pay anything now that it is taking back the routes, said Patrick Elster, the paper’s vice president for circulation.

“We have exercised our contractual right to terminate these agreements,” Elster said. “I know for a fact that these folks have paid each other large sums. Originally, the dealerships were given away and the Register was never given any money” in subsequent sales.

So far, eight dealers, including five on Wednesday, have lost their lucrative businesses. Elster would not say when the remaining dealers would be taken over.

Dealer Dick Angel said his contract was terminated in mid-December without warning. “There was no reason, no warning, no compensation,” he said, adding that he paid more than $100,000 for his dealership last year.

“I was so ticked off that I wanted to do damage,” Angel said. “That’s how hostile some of us have gotten since we have left.”

Elster said that some independent dealers have threatened some management employees, who have also reported vandalism to their homes. He said police have been called to investigate.

Citing possible litigation, Elster refused to say why the paper was taking over the distribution of single-copy street sales. Such sales represent about 17% of the Register’s total circulation--or about 56,000 papers daily and 70,000 Sunday, he said. Some of the dealers have been offered jobs with the newspaper.

“I said, ‘How can I work for you when I plan to sue you,’ ” said Jack Bergstrom, owner of a 7-Eleven convenience store in Orange.

Larry Hodel took the job--at about half the pay he was making. But he said he had to sign an agreement Friday that he wouldn’t sue the Register. He said he had paid $100,000 for his dealership about 18 months ago.

Angel and others have said the Register’s reasoning has been “unclear.” Some were told it was a cost-saving measure and others were told that the paper wanted more control over street sales.

Taking such distribution in-house is not unusual. In the mid-1970s, the Los Angeles Times stopped using independent dealers. But The Times had the dealerships valued and paid the dealers for the routes, said William J. Mason, a former independent dealer for The Times and now a distribution service manager for The Times Orange County.

The five Register dealers let go this week had worked in the North County area. Angel said the Register has rented a large warehouse in Fullerton to service the area and is about to lease a large warehouse in the Newport Beach area as it prepares to terminate nine more dealers.

Typically, dealers receive about 10 cents for each daily paper and 50 cents for each Sunday paper sold. Elster said the rates vary among dealers. The dealers each distribute about 2,000 to 4,000 papers a day and about 5,000 to 7,000 papers on Sunday. That amounts to average earnings of about $3,700 a week.

But the dealers have expenses too. Angel is on the hook, for instance, for a $700 monthly rent payment on the warehouse he leased. There also are costs for truck purchases or rental, gasoline and other expenses in running a business. In addition, dealers also help the Register look for new stores and new locations for racks.

Each of the dealers also hires 10 to 12 part-time workers to distribute the papers. In a few cases, Angel said, some of those part-time workers have been hired by the Register.