Yep, another sale: Sun-Times to press on with new owners

For the fifth time in 28 years, the Chicago Sun-Times is changing hands.

Wrapports LLC, a new local investor group headed by Michael Ferro Jr., CEO of Chicago-based Merrick Ventures, has reached agreement to buy the parent company of the Sun-Times and 40 suburban daily and weekly publications and websites for a reported $20 million.

Identified among “significant investors” in the group was Joe Mansueto, chairman of Morningstar Inc. and owner of Time Out Chicago.

Wednesday’s announcement came despite repeated denials by Sun-Times Media chairman and CEO Jeremy Halbreich that discussions with prospective buyers were under way in recent weeks. Even after details of the agreement were reported online Tuesday by the Chicago Tribune and Crain’s Chicago Business, sources said, Halbreich ordered Sun-Times editors to withhold publication of their story for more than 24 hours.

The timing of the deal also raised questions about the company’s decision to erect a paywall for access to online content just two weeks ago.

Halbreich said he was stepping down, effective immediately. “One of my principal concerns and goals has been to ensure the company passed into the right set of hands for the next phase of its evolution and growth,” he told employees in a memo Wednesday. “I know this to be the case in Wrapports LLC and its group of investors with their strong and deep commitments to the Chicago community and to the value of local journalism.”

Ferro and fellow investor John Canning Jr. are board members of the Chicago News Cooperative, which supplies content to the New York Times and operates its own website. The nonprofit news organization is headed by a cadre of former Tribune editors and writers, including Jim O’Shea, David Greising and Jim Warren, whom the Sun-Times reported will have “no role” in running the new acquisitions.

There’s also a Tribune connection involving the new owners’ choice for CEO. Timothy Knight, former publisher and chief executive of Newsday under Tribune ownership, previously held a number of other posts in Tribune Co. management.

“We look forward to introducing cutting-edge technologies, new content portals and other tools that will expand and drive richer and more satisfying content to readers, while providing more targeted and measurable promotion options for our advertising partners,” Knight said in a statement. “At a time when the public’s appetite for news stories, photographs, videos and blogs has reached an unprecedented level, Sun-Times Media is poised to meet that demand by developing creative ways to deliver a true multimedia experience for our users — how they want it, where they want it, when they want it.”

While Sun-Times staffers are pondering their fate and that of current editorial management, they’re also speculating on what strategy their new bosses may have to achieve the profitability that has eluded current owners.

After enjoying nearly 40 years of stability under the benign ownership of its Marshall Field family founders, the Sun-Times has been on a rocky road since the mid-’80s:

• In 1984, Rupert Murdoch’s News Corp. bought the Sun-Times from Field Enterprises for $90 million. Led by star columnist Mike Royko, an exodus of some of the top talent ensued. The tone of the paper went decidedly downmarket — as did circulation. After two years, Murdoch cashed out in order to comply with federal regulations when he acquired WFLD-Channel 32 as part of his fledgling Fox Television Network.

• In 1986, News Corp. sold the Sun-Times for $145 million to publisher Robert Page and the New York investment firm of Adler & Shaykin. Page exited in 1988, leaving Adler & Shaykin sole owner.

• In 1994, Adler & Shaykin sold the paper for $180 million to Hollinger International, a Canadian firm headed by Conrad Black and David Radler. Black and Radler picked up dozens of suburban publications and sold the Sun-Times’ riverfront real estate to Donald Trump. They also presided over a circulation-reporting scandal, pillaged the company, and wound up in prison for their financial misdeeds.

• In 2009, a local investor group headed by Jim Tyree, CEO of Chicago-based Mesirow Financial, saved the bankrupt Sun-Times from liquidation at the 11th hour by acquiring the company for $25 million in cash and assumed debt, and forcing major concessions from unions. In addition to extensive layoffs and other cutbacks, the company slashed costs by closing its printing operation and outsourcing to Tribune Co. presses. Before he could implement much of his strategy to shift to a digital news operation, Tyree died in 2011.

• Before the start of 2012, Ferro’s group is expected to close on its $20 million deal for what remains of the nation’s 12th largest newspaper group.

And now a word from the editor: Frank Sennett explains Time Out Chicago's new online commenting system. Click on this link.