The credit rating of Irvine-based Freedom Communications Inc., parent of the Orange County Register, has been downgraded amid the newspaper slump and on the prospect of possible borrowing to buy out investors.

Standard & Poor's Rating Services cut Freedom from "stable" to "negative," citing weak results at the company's big daily newspapers.

The cut also "reflects the potential for additional borrowings in May 2009 associated with the company's contractual obligation to fund a repurchase of the equity interests held by its minority shareholders," S&P credit analyst Peggy Hebard said in a statement.

In 2004, Freedom's family owners sold a near-majority stake in the company to private equity investors Blackstone Group and Providence Equity Partners.

Freedom now has an option to buy a portion of the stakes held by Blackstone and Providence. In 2009, the investors have the option to sell their entire stakes to Freedom.

Chief Executive Scott Flanders has said one of his goals is to return Freedom to full family ownership.

"Standard & Poor's assumption is that a major portion, if not all, of the repurchases would be debt financed by Freedom Communications, resulting in a re-leveraging of its balance sheet," S&P said.