CHICAGO — An investor group led by
former Chicago alderman Edwin Eisendrath and the Chicago
Federation of Labor on Wednesday bought the Chicago
Sun-Times, keeping the city’s No. 2 paper in business
and ending a bid by the Chicago Tribune’s owner to
acquire its longtime rival.
The sale of the Sun-Times by its owner, Wrapports,
followed two months of negotiations, public pitches for bidders and
close guidance from federal antitrust regulators. Sources familiar
with the deal put the price tag at $1, or the cost of a single copy
of the storied tabloid.
“We’ve closed,” said Eisendrath, 59. “I’m very
grateful to everyone who made it possible to save this independent
news voice in Chicago.”
With the Sun-Times losing about $4.5 million per
year, the purchase still could prove to be expensive for the new
owners. Eisendrath said he would have more to say about his plans
for the newspaper at a Thursday news conference.
In addition to union backing, Eisendrath’s group
includes corporate turnaround specialist Bill Brandt and a handful
of unnamed Chicago investors who pooled the required $11.2 million
needed to fund the newspaper’s projected losses over the next 30
months, according to Brad Bulkley, a financial adviser to Wrapports
in the sale.
“We were trying to maximize value, but an equally
important objective was to keep the paper published,” Bulkley said
Chicago-based Tronc, which owns the Tribune, Los
Angeles Times and seven other major newspapers, announced May 15
that it had entered into a nonbinding letter of intent to acquire
Wrapports — whose properties include the Sun-Times and the Chicago
Reader — for an undisclosed price. The Sun-Times is obligated by a
$25 million annual printing and distribution contract with the
Chicago Tribune through 2019.
While Tronc pledged that the 69-year-old Sun-Times
would remain an independent news operation, the Justice Department
intervened, seeking to preserve competition through separate
Wrapports published notice of the proposed sale to
Tronc and solicited competitive bidders May 16, posting in the
Sun-Times that it was seeking a buyer “that will agree to publish
the newspaper.” According to the terms of the deal, if no other
“viable buyer” emerged within 15 days, the Sun-Times would be sold
At the behest of the Justice Department, the
deadline was extended several times to accommodate potential buyers
until Eisendrath’s group submitted its bid June 19.
“Tronc has always been committed to keeping the
Sun-Times an independent media voice within the city of Chicago,”
Tim Knight, president of TroncX, the digital division of Tronc, said
in a statement. “We’re pleased to see that happen and we look
forward to the new owners honoring our contractual agreement for
printing and distribution services under the terms of our multi-year
agreement. Tronc will move ahead to execute our growth strategy,
leverage technology and increase the digital audience of our award
winning journalistic brands.”
In a statement, the Justice Department said that
as a result of the sale to the investor group, the agency will close
its investigation of Tronc’s possible acquisition of the Sun-Times.
Wrapports, a local investor group formerly headed
by Tronc Chairman Michael Ferro, acquired the Sun-Times and 38
suburban newspapers for about $20 million in December 2011. The
suburban papers were sold to the Tribune for $23.5 million in 2014.
Ferro became chairman of Tronc and its largest
shareholder in February 2016. He has since added to his holdings and
now owns 9.05 million shares, which represents a 27.7 percent stake
Last year, Ferro donated his 40 percent stake in
Wrapports to the California Community Foundation to avoid conflicts
Other Wrapports owners include Chicago private
equity executive John Canning and Morningstar founder and Executive
Chairman Joe Mansueto, who each hold about a 10 percent stake in the
company, according to a 2014 economic disclosure statement filed
with the city
The Harvard-educated Eisendrath served as alderman
for Chicago’s affluent 43rd Ward from 1987 to 1993, when he resigned
to become regional administrator for the U.S. Department of Housing
and Urban Development.
In 2006, Eisendrath unsuccessfully challenged
then-incumbent Gov. Rod Blagojevich in the Democratic gubernatorial
primary. Eisendrath made an unsuccessful Democratic primary bid for
Congress against Sidney Yates in 1990.
Eisendrath currently serves as managing partner of
StrateSphere, an Ohio-based business development company.
Founded in 1948 by Marshall Field III, the
Sun-Times has had a colorful history and a succession of owners over
the years, including media baron Rupert Murdoch, who bought it in
1984. Murdoch was forced to sell the Sun-Times in 1986 after
acquiring WFLD-Ch. 32 because of Federal Communications Commission
In 2009, a group led by former Mesirow CEO Jim
Tyree rescued the Sun-Times from bankruptcy, paying $5 million in
cash and taking on $20 million in liabilities. Wrapports stepped up
to buy the newspaper after Tyree’s death in 2011.