Sun-Times parent company files Chapter 11

Letter to readers: Sun-Times still in business
March 31, 2009 (CHICAGO) The parent company of the Chicago Sun-Times has filed for Chapter 11 bankruptcy protection.

Just three months ago the Chicago Tribune filed for bankruptcy protection.

Many industry analysts predict Chicago will soon lose one of its major newspapers.

A spokesperson for Chicago's scrappy tabloid insists the Sun-Times will survive. But with newspapers across the country folding under the pressure of a recession and around the clock content available on the web some are skeptical.

His paper is in bankruptcy, but on Tuesday night Sun-Times political reporter Abdon Pallasch is still on the beat.

"I think everyone is kind of hanging in there hoping for the best," said Pallasch.

The Sun-Times is no stranger to turmoil at the top. While all newspapers are struggling... today's money trouble at the Sun-Times can be traced back to former owner -- and current federal inmate -- Conrad Black. He was convicted of using the paper and other properties to line his own pockets.

Unlike the Tribune, which owes banks money, the Sun-Times' biggest IOU is to the IRS: $608 million in back taxes. The tab has made it nearly impossible for the paper to attract investors or a buyer.

"Our goal is to save as many jobs as possible going forward however it's really difficult to predict where this process will go from here," said Tammy Chase, Spokesman, Sun-Times Media Group.

"The Sun-Times has nothing at all going for it. Period. End of story. It's over," said Jay Mariotti, former Sun-Times columnist.

There were harsh words from former Sun-Times sports columnist Jay Mariotti who left the paper last August and now writes for AOL. He says the writing's been on the wall for years, as the paper was slow to embrace the internet.

"They needed to get their head out of the sand about six years ago and hey didn't. And now here they are bankrupt and about to go out of businesses," said Mariotti.

Sally Duros was laid off from Sun-Times last year. She's now among many print veterans migrating to online only journalism.

"I'm involved in an effort to create a new newsroom out of existing news gathering organizations online," said Duros.

Meanwhile, those doing it the old fashioned way hope Chicago can remain a two-newspaper town.

"You read the Sun-Times in the morning to find out what's going on in Chicago and I think that's going to go on for years to come," said Pallasch.

The Sun-Times continues to bleed money, on average $14 million a quarter. The tribune, by contrast, is profitable but saddled with debt. But it's that profit that has many believing the Tribune can survive bankruptcy whereas the Sun-Times simply hasn't figured out a way to make money in today's newspaper environment.

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