Tronc seeks to acquire Sun-Times
Paper would remain independent under owner of L.A. Times and Chicago Tribune.
In the long and raucous history of Chicago newspapers, Monday will rank as a “stop-the-presses” day after it was announced that, in short headline style: “Chicago Tribune Seeks to Buy Chicago Sun-Times.”
Tronc, the parent company of the Los Angeles Times and Chicago Tribune, entered into a nonbinding letter of intent to acquire Wrapports Holdings, which owns the Sun-Times as well other assets such as the Chicago Reader alternative weekly, the Aggrego digital content business and the syndicated column The Straight Dope.
The announcement follows months of discussions between Wrapports and Tronc and after both organizations worked closely with the Department of Justice’s antitrust division.
The tentative deal means Chicago would remain one of the last two-newspaper cities in the country, though those papers would operate under a single corporate owner. Terms of the potential deal were not disclosed.
“There are minor points still to be worked out, but we are confident that we will be able to move forward on this transaction and reach a definitive agreement,” Tronc CEO Justin Dearborn said. “This is generally viewed as good for all Tronc shareholders.”
Dearborn also said the deal would help the SunTimes “maintain its independent voice.”
The Tribune has long been looked at as a potential suitor for the Sun-Times, especially since Tronc Chairman Michael Ferro once owned the paper and parted with Wrapports only when he moved to Tribune Publishing, which he renamed Tronc.
Business ties between the papers predate even that. Beginning in 2007, the Tribune began distributing the Sun-Times, and four years later began printing the Sun-Times. In October 2014, what was then known as Tribune Publishing acquired all of Sun-Times Media’s suburban properties from Wrapports, a deal that comprised six daily and 32 weekly suburban newspapers, for $23.5 million.
In a statement, Wrapports said it will publish a full-page ad Tuesday, seeking a buyer and committing to remain independent.
Publishing the ad was a Justice Department request, and if no other bidder emerges, Tronc said its purchase of Wrapports would close as soon as June 1.
In a statement, the Justice Department said it was monitoring the deal. “If another viable buyer comes forward within 15 calendar days, then the interested buyer will be provided a reasonable opportunity to conduct additional due diligence and negotiate the purchase of the Chicago SunTimes,” the statement said.
Wrapports said it already has exhausted efforts to find another buyer in Chicago or elsewhere, and Tronc’s offer pledges to “operate the SunTimes as a separate unit, keeping in place the independent newsroom.”
“We look forward to operating the Sun-Times as a separate news unit, which means an independent SunTimes will continue to produce the award winning journalism readers are accustomed to seeing online and print daily,” Jim Kirk, publisher and editor in chief of the Chicago Sun-Times, said in the statement. “The Chicago Sun-Times is an integral part of the fabric of the city and this path is an opportunity for the SunTimes to thrive.”
Like the Tribune, which traces its history to 1847, the Sun-Times has deep roots, as far back as 1844 as the Chicago Daily Journal and later morphing into the Chicago Illustrated Times in 1929. The paper on newsstands today was the result of a 1948 merger of that publication with the Chicago Sun, which was founded Dec. 4, 1941, by Marshall Field III.
That paper was sold to press baron Rupert Murdoch in 1984 (he sold it two years later) and it has been on a roller-coaster ride along with the rest of the industry ever since.
Set against a backdrop of decreasing circulation and diminishing advertising revenue, the paper went through a succession of owners and staff reductions. In 2011, the Sun-Times was acquired by Wrapports, an investor group assembled by prominent Chicago investor John Canning but led by Ferro, for about $20 million, from the estate of James Tyree, who had recently died after having led the newspaper out of its 2009 bankruptcy.
In 2014, Ferro gave up his stake in Wrapports and stepped down as its chairman when he paid $44.4 million for a 16.6% stake in Tribune Publishing, which owned the Tribune and 10 other daily newspapers. At the time he relinquished any operating involvement with the Sun-Times.
Now it is likely he will be running both papers, giving the Sun-Times the solid financial footing it has long been without and providing the Tribune with, as Dearborn put it, “increased unique visitors, better engagement with Sun-Times consumers and more data for future initiatives.”