Michael W. Ferro Jr., the tech entrepreneur who says he’s out to “save journalism,” sits atop a growing Chicago media empire that encompasses the Chicago Tribune, RedEye Chicago, Chicago magazine and a string of 38 suburban daily and weekly newspapers stretching from Aurora to Waukegan to Gary, Indiana, among other publications and websites.
Rarely has one person held so much sway over so many Chicago area mastheads.
To avoid “perceived conflicts of interest,” Ferro announced last month that he had turned over his 40 percent financial stake in Wrapports, the company that owns the Sun-Times and the Chicago Reader, to a charitable trust.
But as Crain’s Chicago Business has pointed out repeatedly, he’s never identified the charity. “It is a completely new charitable trust at a very large organization,” Ferro said in a Tribune interview. Sounding a bit like Donald Trump, he added: “It's a very big organization.”
Yet those perceived conflicts of interest persist. As chairman of Tribune Publishing since early February, Ferro hasn’t quite kept his hands off Wrapports.
Six weeks ago he lured away Susanna Homan, the publisher and general manager of the Wrapports-owned weekly supplement Splash, to become editor-in-chief and publisher of Chicago magazine (kicking esteemed editor Beth Fenner to the curb). Earlier this week he followed up by buying Splash and reinstating Homan as editor and publisher of that magazine too. Terms of the deal were not disclosed.
More significantly, Ferro has never disavowed ambitions to take back the Sun-Times and combine its ownership with the Tribune if he can get around antitrust issues. On the contrary, he said in the Tribune interview: “I do see that someday, and why not?”
A filing Tuesday with the Securities and Exchange Commission shed additional light on Ferro’s intertwined media interests. Among the highlights:
- One month after Ferro took over Tribune Publishing, he made a deal for the company to share content with Aggrego, a digital subsidiary of Wrapports that fed the SunTimes Network under Ferro. The agreement “to place widgets in our publication websites which link to related content on Aggrego’s websites” calls for Tribune Publishing to pay $900,000 in the first four months and half of all advertising revenue after that.
- Wrapports paid Tribune Publishing $30 million last year for printing and distribution of the Sun-Times.
- In connection with the sale of the 38 suburban publications previously owned by Wrapports, Tribune Publishing paid the Sun-Times “approximately $2.6 million” last year in a transition services agreement.
- Tribune Publishing leases a Bombardier jet from Merrick Ventures, a venture capital and private equity firm controlled by Ferro, at cost of $8,500 per flight hour.
- “In March 2016, Merrick Media and Merrick Management divested their ownership interests and ceased to have any other financial interests in Wrapports,” the report states.
(This blog is published independently under a licensing agreement with Chicago Tribune Media Group.)