Sun-Times on the selling block — and Tribune owner wants to buy it

Wrapports LLC, which owns the Chicago Sun-Times, is poised to sell its assets to Tronc, the parent company of the rival Chicago Tribune and several other major newspapers, by June 1 if no other bidder emerges.

But the proposed deal, both companies said Monday, would not mean the end of Chicago as a two-newspaper town. Rather, Tronc would own and operate the Sun-Times as a separate entity.

The Sun-Times is publishing a full-page advertisement in Tuesday’s paper “seeking new ownership that will commit to preserving the Sun-Times as an independent news source in the city of Chicago,” Wrapports officials said in a statement.

After that, the Sun-Times will be sold to Tronc “if no other viable buyer expressing substantial interest” within 15 days, according to the Department of Justice’s Antitrust Division, which investigates newspaper mergers. Tronc also would acquire the alternative weekly Chicago Reader and Wrapports’ stake in Aggrego, a digital content company.

Federal investigators “will closely monitor the sale process for the Chicago Sun-Times, including whether any other viable buyer expresses interest,” according to a Justice Department statement.

In a memo to employees, Sun-Times Publisher and Editor In Chief Jim Kirk said the companies entered discussions several months ago and informed the Justice Department of the “possibility of a transaction.”

“Like many other metropolitan news operations, the Sun-Times continues to face enormous challenges in an industry roiled by changes in the marketplace,” Kirk said in the memo. “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,” Kirk added. “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.”

Alan Mutter, a professor of media economics at the University of California-Berkeley’s Graduate School of Journalism and a former Sun-Times financial reporter and city editor, said the advertisement soliciting other bidders appears to be a formality in an era of media consolidation.

“I can’t imagine anything getting in the way of this transaction,” Mutter said. “If they had another buyer, it could have been done more quietly. They’re putting their ducks in a row.”

Terms of the potential Tronc-Wrapports deal were not disclosed. The two companies already are closely linked. Chicago Tribune Media Group began distributing Sun-Times print editions in 2007 and took over printing of the Sun-Times in 2011.

Wrapports, led by tech entrepreneur Michael Ferro, bought the Sun-Times in late 2011. Wrapports then sold all the Sun-Times’ suburban publications to the Tribune in 2014.

But in early 2016, Ferro bought a controlling stake in Tribune Publishing and rebranded it as Tronc, short for Tribune online content. He donated his stake in Wrapports to a charitable trust in March 2016 to avoid “perceived conflicts of interest.”

Ferro has made no secret of his intent to bring the Sun-Times back under his control. He told the Tribune last year, “Do I believe someday that in order to help the Sun-Times survive, if there was a way to combine them, but (that) allowed the Sun-Times to have complete editorial independence, like our other papers do? I do see that someday, and why not? Why can’t we share financial costs and things like that, but let them run on their own? That’s how it would be.”

Mutter said the companies’ stated goal of maintaining separate newsrooms is good “in theory” but might not be sustainable given the realities of the media landscape. Still, it makes sense for the paper in the short term, Mutter said.

“The initial jolt of financial support and infrastructure could change the financial situation for the Sun-Times. The good thing is that the Tribune has resources in place,” he said. “The question that hangs over it all is how much worse will things get in the industry.”

Newspaper editorial staffs have been slashed to half of what they were a decade ago, and with more than half of readers older than 60, audiences are dying out, Mutter said. Newspaper advertising revenue across the country was valued at nearly $50 billion in 2005. That figure was below $16 billion in 2016, with numbers shrinking every month since mid-2006.

As it stands, Chicago is one of the few cities in the U.S. that still has more than one independent newspaper, along with New York City, Los Angeles, Boston and Philadelphia.

“It’s very sad that the Sun-Times is not viable as a free-standing newspaper,” Mutter said. “It has a phenomenal history, and it has served Chicago well for a long time.”

Key events in Sun-Times history

1929: The first edition of the afternoon Chicago Daily Times rolls off the presses on Sept. 3.

1941: Marshall Field III launches his morning newspaper, the Chicago Sun.

1947: Field buys the Times.

1948: The Sun and the Times merge. By spring 1950, the Chicago Sun-Times officially becomes a morning newspaper.

1955: Construction of the Sun-Times building at 401 N. Wabash begins. The first edition printed at the Sun-Times Building rolls off the presses on Jan. 23, 1958.

1956: Marshall Field IV buys the Chicago Daily News, the storied afternoon newspaper founded in the 1870s.

1970: Tom Fitzpatrick wins Pulitzer Prize for general reporting.

1971: Jack Dykinga wins Pulitzer for feature photography.

1973: Ron Powers wins Pulitzer for criticism.

1974: Art Petacque and Hugh Hough share Pulitzer for general reporting.

1975: Roger Ebert wins Pulitzer for criticism.

1978: Citing declining circulation, the Daily News ceases publication.

1982: John H. White wins Pulitzer for feature photography.

1984: The Field family sells the Sun-Times to Rupert Murdoch’s News America, Inc., which also acquires WFLD-Channel 32. Under pressure from the Federal Communications Commission, News America sells the Sun-Times in 1986 to an investor group.

1989: Jack Higgins wins Pulitzer for editorial cartooning.

1994: American Publishing Co., a subsidiary of Hollinger Inc. of Vancouver, Canada, buys the Sun-Times and dozens of suburban papers acquired since the mid-1980s. The stock-purchase transaction is valued at $180 million.

2004: Hollinger chief Conrad Black is fired by the Hollinger board over fraud allegations. Sun-Times moves its offices to 350 N. Orleans to make way for Trump Tower on the 401 N. Wabash site.

2006: Hollinger becomes Sun-Times Media.

2007: Black is sentenced to prison for looting Hollinger.

2009: Investors led by Mesirow Financial’s James Tyree buy Sun-Times Media out of bankruptcy in a $25 million deal.

2011: Frank Main, Mark Konkol and John J. Kim share Pulitzer for local reporting.

March 2011: Tyree dies suddenly.

December 2011: Wrapports LLC, led by Chicago tech entrepreneur Michael Ferro, buys Sun-Times Media in a $20 million-plus deal. Wrapports sells its suburban papers to Tribune Publishing in 2014.

May 15, 2017: The owner of the Chicago Tribune and other big newspapers, now known as Tronc, announces its intent to buy Wrapports’ assets.

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