Is The Sun-Times In Trouble? Board Member Tells Staff Not To Worry
By Sam Stecklow in News on Feb 5, 2016 7:36PM
So what happens to the Sun-Times now that Michael Ferro has left its barely-breathing body to go peck away at the bigger paper across town? According to Bruce Sagan, a board member of Sun-Times owner Wrapports, longtime publisher of the Hyde Park Herald, and new chairman of the board of Sun-Times Holdings, it's in good shape.
Sagan told the staff that he believes this, at a meeting reported by Sun-Times columnist Neil Steinberg, because Tribune Publishing is $400 million in debt, and Wrapports doesn’t have any.
But one key piece of context is the reason why Wrapports is debt-free. Soon after Ferro took over in 2011, he began dismantling the network of suburban newspapers owned by the Sun-Times, which were regarded as being the main money-makers in the company. First, he closed all of the suburban offices, forcing most of the suburban papers’ employees to work from home or move into Wrapports’ office space at 350 N. Orleans St., which was full to begin with. Then, in October 2014, he sold all of the suburban papers to Tribune Publishing for $23.5 million. Some $20 million of that went to cover Wrapports’ standing debts—much of which was to Tribune Publishing due to some missed bills when Ferro and his team took over and declined to pay printing and distribution costs.
So yes, Wrapports is debt-free—but since it was bought out of bankruptcy by the previous owner, James Tyree, who, through cuts and other measures, pushed the newspaper into the black—its previous debt was Michael Ferro's responsibility. And, as has been noted, Ferro is remarkably bad at spending money, burning through millions on failed projects including iPad apps, numerous website redesigns, a glossy business magazine, and a political hub. (Notably, the Sun Times Network, which has been described by former Sun-Times managing editor Craig Newman as a "garbage" "money drain," is still standing.) So it’ll be interesting to see what's in store for Tribune Publishing.
Sagan, who told the staff "If I have my way you'll be here forever," according to Steinberg, had some choice words about Ferro and the Tribune:
"You made a mistake," Sagan said. "You educated him. He came here a rich guy who didn't know anything about journalism. The rich dabbler got the message from you ... If you are going to bet on something, better bet on us. They're in disarray. He left us a growing institution. ... We now have a focus. The other guy's still the enemy."
Sagan also tried to assuage worries that Ferro's latest move might spell the end of Chicago's time as a two-newspaper town.
"The people involved in the last Sun-Times purchase believe in two newspapers," Sagan said. "There it is, a second voice."
(Disclosure: For four months last year, I was an intern at the Sun Times Network.)