Here we go again!
For the six time in thirty years – and the second time in two years – the Chicago Sun-Times has a different owner.
Wrapports LLC, a newly formed venture headed by Merrick Ventures LLC CEO Michael Ferro Jr. and Madison Dearborn Partners LLC Chairman John Canning Jr. have agreed to purchase the Sun-Times and its numerous suburban newspaper chains for $20 million. Wrapports does not plan to assume any outstanding debt.
Both Ferro and Canning are investors in the non-profit Chicago News Cooperative, a group that publishes the local Chicago edition of The New York Times and also publishes its own news website. The Cooperative has no plans to merge its operations with the Sun-Times or any of its properties.
As a result of the sale, current Sun-Times Media Chairman and CEO Jeffrey Halbriech is stepping down. The Chairman/CEO role is now being split into two with former Tribune Company exec Tim Knight taking over in the CEO role, while Ferro becomes Chairman.
The sale comes as the newspaper industry struggles to stay relevant at a time when circulation is plummeting and readers – particularity younger ones – are getting their news from other resources. The Sun-Times has been one of those whose been hit the hardest over the last decade or so, with numerous cutbacks, layoffs, a reduction in size, and even closing its Ashland Avenue printing plant and outsourcing its printings to the rival Chicago Tribune’s facilities. Recently, the Sun-Times and its suburban newspapers erected a paywall for its website content, a move that was panned by critics and readers alike.
As noted by former Sun-Times media critic Robert Feder, the paper has been sold five times since 1984. Among the parade of individuals who were involved in ownership of the Sun-Times include Rupert Murdoch, Conrad Black (who went to jail in a scandal involving his newspapers), and most recently Mesirow Financial CEO Jim Tyree, who died earlier this year. It was a group of investors headed by Tyree who rescued the Sun-Times from bankruptcy in 2009 for $25 million, assuming $20 million in debt in the process.
As for future plans for the paper, Knight stated while the paper would remain integral to its portfolio, the main priority would be evolving its digital strategy – particularly with its suburban newspapers’, whose websites are little viewed (despite this, don’t look for the new owners to drop that paywall anytime soon.)
News of this sale sale first surfaced Tuesday on both the Chicago Tribune’s and Crain’s Chicago Business’ websites, but ironically not on the Sun-Times’ own site as Mr. Halbriech ordered editors not to publish anything regarding the sale of the paper at the time (maybe he was still figuring out how to get around the paywall on their website after he stepped down as CEO.)
Thought: You wonder why these guys want to sink money in something that is – um, sinking. In order for the Chicago Sun-Times to become competitive again, they need to find someway to increase the resources to put out a better product than they are now. Continuing to cut their way to profitability and charging readers for a clearly inferior website product isn’t the answer. Maybe Wrapports will be a better organization than the clowns who were gutting the paper after Tyree’s death. But I doubt it.