Second City nears sale to private equity mogul: report

New York investor Strauss Zelnick is said to be negotiating for the company that has launched the careers of comic legends.

The home of the Second City comedy club and school in Chicago’s Old Town, as seen last October.

Chicago’s Second City comedy business could get a buyer from the Big Apple.

New York private equity investor Strauss Zelnick is in advanced talks to buy Second City, the Financial Times reported. Citing two sources, the paper said a deal for about $50 million could close this week.

It would be only the second sale in the legendary troupe’s 62-year history. Famous as a springboard to fame for many comics, Second City has had to shut its live shows because of the coronavirus pandemic. It has turned to online events, including its classes in improvisation, while developing customized programs for corporations.

Zelnick runs the private equity firm ZMC and has invested in music and communications ventures. He’s also CEO of Take-Two Interactive Software, known for its Grand Theft Auto franchise of games.

A ZMC representative did not return a message Tuesday. Others who did not return messages included Second City President Steve Johnston and representatives of the Houlihan Lokey investment bank advising the comedy club in the sale.

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Second City was founded in 1959. Its live shows have been a proving ground for alums such as John Belushi, Tina Fey, Bill Murray, Steve Carell, Julia Louis-Dreyfus, Stephen Colbert and Dan Aykroyd, among many more.

The business put itself up for sale in October. At the time, Johnston said in a statement, “While all our lives have been affected by the pandemic, The Second City has found green shoots that have further highlighted our growth potential. The company’s growth plan leverages Second City’s unique position in the comedy ecosystem as the leader in both education and live sketch and improv performance to capture market share in the short to medium term, as well as accelerate a transition toward digital delivery of programming, which is already off to a great start.”

In June, a co-owner of Second City, Andrew Alexander, stepped down from the troupe after a 47-year run because of allegations of racism within the company. Second City’s majority owner is D’Arcy Stuart, son of former owner Len Stuart. With Alexander, Len Stuart bought the company in the 1980s from founders Bernie Sahlins, Paul Sills and Howard Alk.

Separately, Second City arts educators and facilitators have filed notice with the federal government declaring their intention to form a union. The filings, announced Tuesday, are unrelated to news of a possible sale, said Amy Excell, spokeswoman for the Illinois Federation of Teachers.

“This group has been working on this for months,” Excell said. She said the proposed union, called the Association of International Comedy Educators, would cover 160 people in Chicago and more at Second City operations in Hollywood and Toronto. The Chicago union would be affiliated with the IFT.

Excell said about 70% of eligible workers in Chicago signed union cards, filed with the National Labor Relations Board. Second City could recognize the union or call for an election that the board would run.