Sun-Times Owners Say They Could Shut Down The Paper If Tronc Deal Falls Through: Report
By Rachel Cromidas in News on Jul 7, 2017 8:41PM
Getty Images / Photo: Scott Olson
The owners of the Sun-Times say they may shut down the Chicago-based newspaper if the deal for publishing company tronc (formerly known as Tribune Publishing, as in the Chicago Tribune) to buy the paper and other media properties falls through.
Wrapports, the company that owns the Sun-Times, struck a deal with tronc for the sale of the paper earlier this year, but the deal is pending the approval of the Justice Department's anti-trust division. The Justice Department has called for competing offers, but so far few have panned out, possibly because the Sun-Times and other papers that Wrapports publishes are losing money. One element of the costs that favors tronc's bid: According to Crain's, Wrapports currently pays tronc $25 million a year to print and distribute the Sun-Times at its print and distribution warehouse.
Wrapports has been waiting for another investor, a group led by ex-Ald. Edwin Eisendrath, to finalize a competing offer against tronc's bid, but Crain's is now reporting that the group has until just early next week before Wrapports and tronc move forward together. The group would need to have more than $11 million in order to successfully buy the paper, along with Wrapport's local weekly, the Chicago Reader, due to the operational costs. Crain's sources say the papers are currently operating at a $4.5 million annual loss:
"If they're not going to be ready on Monday, we're moving on," said Brad Bulkley, an investment banker handling negotiations for Wrapports.
If the Justice Department's antitrust division goes to court to try to halt a merger with Tronc, Wrapports owners are prepared to shut down the Sun-Times, said sources familiar with the talks.
The goal of Eisendrath and other investors—including some members of the Chicago News Guild, the union that represents some Sun-Times employees and Bill Brandt, who told Crain's he was investing at least close to $2 million—would be to keep the papers independent and separate from the Chicago Tribune.
Brandt called the purchase a "civic duty":
"Without a free press, America is doomed," Brandt said. "In the current environment, the free press has never been more important."