The sale of Chicago's No. 2 newspaper is imminent, sources close to the situation said.
Sun-Times Media is expected to announce Wednesday that it has struck a deal to be bought by a group of local investors led by Michael Ferro, chief executive of Chicago-based Merrick Ventures, a technology holding company. The group also includes John Canning, chairman of Chicago-based private equity firm Madison Dearborn Partners.
The new group plans to name Timothy Knight, the former publisher and CEO of Newsday, which was once controlled by Chicago-based Tribune Co., as CEO of its holding company, sources said.
Existing Sun-Times investors who will remain stakeholders include Chicago Blackhawks owner Rocky Wirtz as well as Mesirow CEO Richard Price.
Talk about branching out! There are some nay-sayers out there, however, who obviously aren't aware of Mr. Ferro's financial accumen:
Many industry observers have scratched their heads over why the new group is plunging into the newspaper business at such a perilous time for the industry and the economy. The Sun-Times emerged from bankruptcy with little debt, and the paper has dramatically reduced costs under Halbreich by, among other things, slashing its workforce and outsourcing its printing operations to Tribune's Freedom Center.Rescuing the Sun-Times might be harder than rescuing Merge, given the fact that print newspapers are going the way of the buggy-whip and corded telephones. Merge was purchased for pennies (?dimes?) on the dollar, and rapidly turned toward success. Look for some unusual paradigm changes that will turn the Times around in a way none of us would expect. Like maybe an iPhone/iPad app that checks your pulse as you read the e-newspaper and adjusts content accordingly. Who knows?
But as is the case for almost every newspaper company, the Sun-Times' revenue has been under pressure for years as advertisers, like readers, gravitate toward the Internet. Tyree's group (In 2009, an investor group led by Mesirow's previous CEO, Jim Tyree, rescued the Sun-Times from bankruptcy for about $25 million. Tyree died earlier this year. The Tyree group paid $5 million in cash for the company and agreed to take on $20 million in liabilities) tried to reverse the trend by emphasizing a digital strategy aimed at making the most of relatively strong Web traffic. But it is too early to tell whether a recent initiative to boost revenue by charging for some online content will pay off.
One longtime industry executive speculated that the risk the new investors are taking may be mitigated by the acquisition price. That has yet to be disclosed but will likely reflect the fact that the Sun-Times remains a work in progress in an industry under siege, the executive said.
I'd like to be the first to apply for special PACS correspondant for the Sun-Times. There might be better writers on staff, but none who can write from the heart like yours truly..