Sun-Times, Tribune to merge?

Owners of Chicago Tribune considering bid to buy cash-strapped newspaper.

It looks like the feared notion of Chicago becoming an one-paper town is about to come to fruition.

On Monday, it was revealed Chicago Tribune owner tronc is pursuing a deal to buy Wrapports, the owners of the Chicago Sun-Times for an undisclosed amount. Should no buyers come forward by June 1, the deal will commence, according to tronc CEO Justin Dearborn.

The two rivals have partnered when it came to distribution and printing; the Chicago Tribune has been printing the Sun-Times since 2007 and delivers the newspapers. But talk of a possible merger fueled when Wrapports owner Michael Ferro also become the biggest shareholder in rival Tribune Publishing, now renamed “tronc”, in smaller-case letters.

In Tuesday’s edition of the Sun-Times, the paper posted a notice of “for sale” sheet as requested by the Justice Department, which is reviewing the transaction. In filings, tronc and Wrapports said it would keep the two newspapers separate, and the Sun-Times would be operated independently from the Tribune.

But if the merger goes through, expect some changes. One could be the consolidation of both the Tribune and Sun-Times’ websites. This setup is similar in Philadelphia, where the Inquirer and Daily News are independent from one another, but share a website in Philly.com. Another example is  in Detroit, where the Free Press and News also share services (but not a single website.) Both have an 100-year joint agreement, and operate under the Detroit Media Partnership.

If the Justice Department approves the deal, Chicago would be the largest market in the country with two newspapers under the same owner. Also remains to be seen if several features to the Sun-Times’ website would be returned, including a paywall and comment sections.

Newspapers had been losing market share and revenue in the last fifteen years or so due to the shift of advertising money to digital – a situation also affecting other media such as television and radio. Paywalls have had mixed results in stemming the losses, with the Sun-Times discarding them a few years back. Both the Tribune and Sun-Times’ quality has paled in comparison with others newspapers in other cities, such as the New York Times and the Washington Post.

The move is the latest jolt to Chicago’s media landscape. Last week, Sinclair Broadcast Group announced its intention to buy Tribune Media, owner of WGN-TV and WGN-AM and 41 other television stations. Earlier this year, Entercom entered into an agreement to buy CBS Radio, owner of WBBM-AM/FM and several other stations.

While the Justice Department is looking over the deal, don’t look for the Federal Communications Commission or the Federal Trade Commission to get involved as neither has jurisdiction over newspapers. But the recent merger and acquisition activity signals a more deregulatory approach under the Trump administration. Another rule affecting newspapers – the cross-ownership rule forbidding television and radio stations from buying newspapers – is also expected to be looked at, and likely get axed.

The deal is also expected to be opposed by many local community groups and unions, but are unlikely to have any influence in any decision the Justice Department makes.

Wrapports also owns the Chicago Reader, whose unionized employees has been embroiled in a dispute with the company over pay.