Chicago Sun-Times
The final chapter in the history of robust competition among Chicago’s daily newspapers may have been written Monday with news that the Chicago Sun-Times is headed for a sale to the parent company of the rival Chicago Tribune.
Wrapports Holdings LLC, owner of the Sun-Times and the Chicago Reader, announced that it was negotiating to be acquired by Tribune owner tronc in a deal that could be finalized by June 1.
Unless another bidder comes forward — an unlikely scenario considering the financial distress of the Sun-Times and the onerous printing and distribution agreements it has with tronc — the deal appears headed for approval by government regulators. Terms have not been finalized, according to tronc.
“If we successfully close, we will be pleased to have the Chicago Sun-Times join our existing family of strong brands and help it maintain its independent voice,” tronc CEO Justin Dearborn said in a statement. “Tronc will benefit from increased unique visitors, better engagement with Sun-Times consumers and more data for future troncX initiatives.”
Jim Kirk, publisher and editor of the Sun-Times, stressed that under tronc ownership the Sun-Times would operate “as a separate unit, assuring that the independent newsroom would remain.” He said Wrapports agreed to enter into talks with tronc only after efforts to seek other buyers failed.
At the request of the Justice Department Antitrust Division, the Sun-Times will run an ad Tuesday announcing that the assets of Wrapports are for sale and seeking potential bidders. The Antitrust Division said it would “closely monitor” the sale process.
“If no viable partner emerges, tronc and Wrapports intend to continue pursuing a deal to successfully close the transaction,” Kirk told employees in an email.
“Like many other metropolitan news operations, the Sun-Times continues to face enormous challenges in an industry roiled by changes in the marketplace,” Kirk wrote. “The investors and board members of Wrapports have been committed to keeping a second media voice in Chicago alive and thriving. But success in digital media requires a national platform that can make significant investments across products and services.”
Assurances by both companies that the Sun-Times would remain editorially independent did little to quell fears of substantial cutbacks to the city’s No. 2 daily. The Tribune’s own account described the deal as “providing a lifeline to the scrappy but struggling tabloid.” Others viewed it as the beginning of the end.
The man behind all the machinations is Michael Ferro, the Chicago tech entrepreneur who headed Wrapports until 2016 when he switched sides to become chairman of Tribune Publishing, later renamed tronc.
Ferro has never disavowed ambitions to take back the Sun-Times and combine its ownership with the Tribune. In an interview weeks after he took over the Tribune, Ferro said of buying the Sun-Times: “I do see that someday, and why not?”
Here is the text of the tronc press release:
tronc Makes Bid for Owner of Chicago Sun-Times
Combination would preserve Sun-Times independent voice, increase tronc’s digital audience
CHICAGO, May 15, 2017 (GLOBE NEWSWIRE) -- tronc, Inc. (NASDAQ:TRNC) has entered into a non-binding letter of intent to acquire Wrapports Holdings, LLC, the owner of the Chicago Sun-Times and other media assets, including its minority ownership interest in digital content network business Aggrego, LLC, the alternative weekly Chicago Reader and syndicated column The Straight Dope.
The announcement comes as Wrapports, at the request of the U.S. Department of Justice’s Antitrust Division, publishes notice tomorrow of its plan to sell the Sun-Times to a buyer that will continue to publish the paper. If no other bidder comes forward, tronc will be that buyer and the acquisition will close as early as June 1.
“The acquisition is the latest in almost a decade of transactions between the owners of the Chicago Tribune and Chicago Sun-Times,” said Tim Knight, president of troncX who also heads mergers and acquisitions for the company.
“In 2007, Chicago Tribune Media Group began distributing the Chicago Sun-Times and its then owned suburban papers,” said Knight. “As this relationship continued to evolve, the parties agreed in 2011 to have Chicago Tribune print the Chicago Sun-Times, an agreement that continues today. Discussions about a further combination of the businesses continued over the next few years, resulting in the Chicago Tribune Media Group’s 2014 purchase of the Sun-Times’ suburban titles.”
“If we successfully close, we will be pleased to have the Chicago Sun-Times join our existing family of strong brands and help it maintain its independent voice,” said tronc CEO and director Justin Dearborn. “tronc will benefit from increased unique visitors, better engagement with Sun-Times consumers and more data for future troncX initiatives.”
Earlier this year, Wrapports management approached tronc leadership about pursuing the transaction. Since that time, the parties have worked with the Department of Justice to demonstrate that this combination is the best way to preserve multiple editorial voices in the greater Chicago area.
The specific terms of the potential transaction are not yet finalized. If it closes, Chicago Sun-Times will continue to be an independent newsroom.
Chicago Sun-Times