Chicago Sun Times Sold
December 21, 2011 by staff
Chicago Sun Times Sold, A group of investors led by Merrick Ventures LLC CEO Michael Ferro Jr. and Madison Dearborn Partners LLC Chairman John Canning Jr. is expected to pay more than $20 million to acquire Chicago’s second-largest newspaper company, Sun-Times Media Holdings LLC, according to sources familiar with the transaction.
The sale is expected to close as early as Monday, a source said. The deal to buy the newspaper chain, which includes the Chicago Sun-Times and suburban daily and weekly newspapers, has been in the offing for weeks and was initially reported last month by Crain’s.
The new owners will tap Tim Knight, CEO of Internet company CraftEdu and a former Tribune Co. executive who was previously publisher of New York tabloid Newsday, to lead the enterprise formed by the new owners, a source familiar with that appointment said.
Mr. Knight first joined Tribune in 1996 from law firm Skadden Arps Meagher & Flom, where he was a lawyer, and held several posts in Chicago, including at the Chicago Tribune, before shifting to Newsday in 2003 to become an executive vice-president and general manager. A year later, he became president and chief operating officer at the Long Island-based paper, before being promoted to publisher and CEO in 2004. He resigned in 2009 and now lives in suburban Chicago.
Mr. Ferro and Mr. Canning, who sits on the Merrick Ventures board, appear to be making the investments as individuals and not through their firms.
They are also both investors and board members at the Chicago News Cooperative, a not-for-profit that provides Chicago news content twice weekly to the New York Times and also publishes on its own website.
Some members of the CNC board other than Mr. Canning and Mr. Ferro have signed non-disclosure agreements regarding the transaction, according to sources familiar with the situation, suggesting CNC may also be involved in the deal in some way. The organization has largely been funded by income from the New York Times arrangement and foundation grants.
The Sun-Times sale follows the March death of former Mesirow Financial Holdings Inc. CEO James Tyree, who led an investment group in 2009 to buy the Sun-Times assets out of bankruptcy and to become chairman of the company.
The group, which included Mesirow’s current CEO, Richard Price, and Blackhawks owner Rocky Wirtz, paid $5 million plus the assumption of $20 million in debt. Mr. Price and Mr. Wirtz also plan to retain stakes in the company, a source said.
Sun-Times CEO Jeremy Halbreich became chairman after Mr. Tyree’s death. He has led the downsizing of the company in an effort to return it to profitability, though there’s no view of whether he has been successful because the private company has declined to provide financial figures.
Mr. Halbreich didn’t return calls seeking comment on the sale. The Chicago Tribune reported late Tuesday that a sale was “imminent.”
Mr. Halbreich has tried to reduce costs by cutting hundreds of jobs in and out of the newsroom as the company centralized its editing and billing systems and outsourced delivery and printing of newspapers to chief rival Tribune.
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