Chicago's Sun-Times Media Group files Chapter 11
NEW YORK - The Sun-Times Media Group, publisher of the Chicago Sun-Times and more than 50 other Midwest newspapers, has filed for voluntary Chapter 11 bankruptcy protection.
The announcement follows rival Chicago Tribune's filing for bankruptcy protection in December, leaving open the possibility that Chicago - the US' third largest city at 2.8m residents - could soon become a one newspaper city.
Philadelphia Newspapers, which owns The Philadelphia Inquirer, filed for bankruptcy protection last month, preceding the closure of the Rocky Mountain News in Denver and Hearst's decision to shutter the print edition of the Seattle Post-Intelligencer.
The Sun-Times Media Group is the fifth American newspaper publisher to file for bankruptcy in the past four months, following several rounds of jobs and pay cuts in order to save money as the recession took its toll.
It's flagship title, the Chicago Sun-Times, is renowned for its investigative reporting and was home to legendary columnist Mike Royko and currently staffs movie critic Roger Ebert.
The Sun-Times Media Group parent company is weighed down by over $608m in back taxes and penalties from mismanagement under former owner Conrad Black, who is now in prison for funnelling funds from corporate coffers.
The company listed about $479m in assets and $801m in debt at the filing. It also agreed this month to pay more than $25m to settle a lawsuit with Canwest Global Communications in Canada over the Conrad Black affair.
Jeremy Halbreich, chairman of Sun-Times Media, in a letter to readers said that the company will continue "business as usual" adding: "Please be assured that this action does not mean the company or our newspapers or online sites are going out of business."
Halbreich said the publisher intends to move through the Chapter 11 process as quickly as possible and expects the process to be completed this year.
Since he took over as chairman in February, Halbreich said he has been approached by several parties interested in purchasing the company and has hired investment bank Rothschild to seek offers.
Elsewhere in the US newspaper industry, the country's largest newspaper, USA Today, announced that its president and publisher Craig Moon would be leaving the company after six years at the helm. The paper has lost about 100,000 subscribers just from the slowdown in travel readership alone.
Parent company Gannett recently enforced a second round of mandatory unpaid leave on its staff after announcing in January that it would write down the value of its newspapers by up to $5.2bn when Q4 profits dropped 36%.
Blog posts of the newspaper crises:
- Bad day to kill print in Detroit/Is there an e-reader/future
- Free lunch is over says The Economist as Indy talks charging.
- This is not a newspaper website (Seattle Post-Intelligencer goes digital).
- Would you buy a failing newspaper?
- Paid for content high on Guardian wish list.
- Time Inc considers charging subscription fees.
- How US newspapers are failing and the local future.
- Newsday -- beginning of the end for free content?
- Is it time for newspapers to start charging for content?
- Could the New York Times go under?
- The end of print for the Independent.
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