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Chicago Sun-Times sale finalized

October 26, 2009 4:10:03 PM PDT
Chicago businessman James Tyree's purchase of Sun-Times Media Group Inc., including the Chicago Sun-Times and more than 50 suburban publications, was finalized Monday. The acquisition was completed for about $26.5 million after an investor group led by Tyree offered to pay $5 million for the assets of the company. The investors also plan to assume about $22 million in liabilities. Earlier this month a major roadblock to the sale was avoided when leaders of five unions that earlier rejected concessions demanded by Tyree agreed to contract changes.

"Our investor team believes there is tremendous opportunity and untapped potential in Sun-Times Media portfolio of newspapers and Web sites," Tyree said in a statement. "On the business side, our intentions are to grow the company by seeking new revenue opportunities, to adapt and lead change in the rapidly transforming news industry, and to become profitable."

A bankruptcy judge approved the sale to Tyree, who heads Mesirow Financial, on Oct. 8. Sun-Times Media filed for Chapter 11 bankruptcy protection in March, citing $479 million in assets and $801 million in debt. It has shed more than 400 jobs since late last year through layoffs and attrition.

If the Sun-Times had gone under, it would have left Chicago, a city of 3 million, with one major daily, the Chicago Tribune, whose parent company is also operating under bankruptcy protection. "We look forward to a long, prosperous future with our new owners," Sun-Times Media Holdings CEO and Vice Chairman Jeremy Halbreich said in a statement.

Among other concessions, Tyree asked unions to agree to lock in 15 percent pay cuts that were originally intended to be temporary.

"It was a tough road to get there for our unions," said Tom Thibeault, executive director of the Chicago Newspaper Guild. "So we're relieved and very happy."

The media group also reported Monday that the Chicago Sun-Times' weekday average circulation over the six months ending Sept. 30 declined 12 percent to 275,641 compared with the same period last year. Sunday circulation for the newspaper was down 1.8 percent to 251,260 and Saturday circulation was 210,027, down 7.9 percent.

The falling circulation was in line with expectations, the company said, and coincided with a rise in the single-copy cost of the newspaper from 50 cents to 75 cents. Meanwhile, home delivery circulation of the Chicago Sun-Times saw a 5.5 percent increase, the media group said.


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