An investment group led by former Chicago Ald. Edwin Eisendrath and a coalition of labor unions has secured enough money to buy the Chicago Sun-Times, Eisendrath said Monday evening.
The group met a 5 p.m. deadline set by the U.S. Department of Justice to come forward with proof of funding to operate the newspaper going forward, according to Eisendrath and others close to the transaction.
Bob Reiter, secretary-treasurer of the Chicago Federation of Labor, said the group raised “in excess of $11.2 million.” Eisendrath characterized the move as a “big step” toward saving “an important second voice in Chicago,” one of America’s last two-newspaper cities.
“It’s a big step, an important step, but it’s not the last step,” Eisendrath said. “We still have work to do to finish a transaction.”
The potential ownership group includes several local labor unions, including the CFL, and about eight individual investors, including corporate restructuring expert Bill Brandt.
“I think it’s a worthwhile challenge,” Brandt said. “It’s a money-losing venture, but this is one of those things where you take a gulp and you do it for the good of the city. Chicago needs two newspapers.”
Eisendrath and Brandt declined to identify the other investors, but Brandt said the group included several people “well-known in the political scene.”
The Justice Department’s Antitrust Division is involved in the sale because of an effort announced in May by Tronc Inc., owner of the Chicago Tribune, to buy the Sun-Times and weekly Chicago Reader. Traditionally, the federal government has frowned on a single entity controlling multiple media operations in the same market.
On Tuesday, Sun-Times publisher and editor-in-chief Jim Kirk sent an email to his staff that reminded them, “…This is not the last step in the process. The parties continue to negotiate to see if a deal can be completed. In addition, the offer from Tronc still remains active.”
Eisendrath’s group submitted a bid for the paper last month, after the Justice Department required the Sun-Times to publish an advertisement seeking other buyers after Tronc submitted its letter of intent to acquire the Sun-Times, Reader and other assets of Sun-Times parent company Wrapports LLC.
“If true, this news is further evidence that the Eisendrath bid is well-funded, and we think it is the best option for keeping the Chicago Sun-Times and Chicago Reader strong and independent,” said David Roeder, a consultant for the Chicago News Guild, which represents Sun-Times reporters and other media members. “We hope the Wrapports board and the U.S. Justice Department will look on it favorably.”
Reiter has said that, if Eisendrath’s group acquired the Sun-Times, the paper would maintain freedom to investigate and report on labor unions.
Both Tronc and Wrapports have said the Tribune and Sun-Times would operate as separate, independent voices if Tronc acquires Wrapports.
The Eisendrath group’s financing was still being verified, and the deal was not expected to close on Monday, sources said.
Sun-Times Publisher and Editor In Chief Jim Kirk declined to comment, as did representatives for Tronc and the Justice Department.