Publisher of the Chicago Tribune intends to acquire tabloid rival Chicago Sun-Times
Sale would include the alt-weekly Chicago Reader and comes would essentially end Chicago’s long history of having multiple, competing dailies
The publisher of the Chicago Tribune, tronc, today announced that it intends to acquire its longtime rival, the Chicago Sun-Times. The acquisition of Wrapports Holdings, which would also include the alt-weekly Chicago Reader, will close by June 1.
This won’t be the usual sale. Wrapports was launched in 2011 by Michael W. Ferro Jr. and Timothy P. Knight, who was former publisher of Newsday. The two came up with the silly name Wrapports as some sort of merging of wrapping (as in print newspaper) and rapport of new technology. It makes about as much sense tronc, the name Ferro gave Tribune Publishing when he took over that company. Ferro had invested $44 million in early 2016.
What followed Ferro’s investment was the ousting of CEO Jack Griffin, Ferro naming a new chief executive officer in Justin Dearborn, and the company buying Splash magazine from the Sun-Times (just to be nice, I guess).
The Sun-Times and Tribune are not very aggressive competitors. Tribune does the printing and distribution of its rival, and bought its suburban holdings back in 2014. In other words, the tabloid has been on life support for a while now
The Sun-Times last audit showed the tab had a weekday circulation of 134,874, about a third of what it had a decade before (341,448). Sunday circulation is about half as much as it was a decade ago, at 141,549.
The Sun-Times is the oldest continuously published daily newspaper in the city, but one with a bit of a wild history. For years it was owned by the Marshall Field family, owner of the famous city department store (since sold to Macy’s). In 1984, Field sold the paper to Rupert Murdoch and the paper moved hard right and became a Midwest version of the NY Post. The rival Tribune has been a loyally Republican paper but Murdoch saw room on the right for his tabloid. The plan didn’t work, however, and Murdoch sold the paper just a couple of years later. In 1994 it was sold again, this time to Hollinger, the newspaper company controlled by Conrad Black. But soon Black was indicted for skimming money from the company and… oh, it’s a long, boring story that ends badly.
No sales price was announced, but one assumes it is negligible. According to the release, the Sun-Times newsroom would continue to operate separately from the Tribune’s. That, however, may have been added for the benefit of the Justice Department who might be expected to object to a sale to the crosstown paper. But no objections can be expected from Donald Trump’s DOJ (who, it should be remembered, under the Obama administration, stopped Tribune Publishing’s attempt to take over the Orange County Register).
Nonetheless, Wrapports purportedly consulted with the DOJ before today’s announcement and will be placing an ad in the Sun-Times saying it intends to sell itself to tronc within the next 15 calendar days, but that if prospective buyers are interested they can begin due diligence and make a bid (as if that really would be likely).
“The investors and board members of Wrapports have been committed to keeping a second media voice in Chicago alive and thriving,” editor and publisher Jim Kirk told staff in a memo. “But success in digital media requires a national platform that can make significant investments across products and services. We believe an ownership that can bring substantial digital resources can help and is the best path for the Sun-Times to succeed long term.”
The announcement of the sale comes just days after editorial employees at the Reader voted 17-0 to authorize their union to call a strike. “We’ve got an offer on the table and the company has not reciprocated. It’s past time for management to treat us with respect,” Philip Montoro, music section editor, told Robert Feder last week.
In addition to the Chicago Tribune, tronc also publishes the Los Angeles Times, Baltimore Sun and other dailies. It was the subject of its own acquisition bid by Gannett last year. Gannett’s bids drove tronc stock up to near $18 a share at the time of the news, but when not deal could be completed the news led to shares falling back down to just over $12 a share.
Here is tronc’s announcement:
CHICAGO, Ill. — May 15, 2017 — tronc, Inc. 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.