CHICAGO (CN) – Ending efforts by Chicago Tribune to acquire its cross-town rival, the struggling Chicago Sun-Times was sold Wednesday to an investment group led by a former city alderman and a coalition of unions.
“The Sun-Times has been an important part of Chicago for our whole lives,” former alderman Edwin Eisendrath said in a statement. “We are inspired by the writing and reporting, and a group of civic-minded leaders wanted to save that.”
Previous owner Wrapports LLC announced in May it was putting the newspaper and other media assets on the market, seeking a buyer that would pledge to run the Sun-Times as an independent paper. Wrapports also sold its interest in the city’s alternative weekly, the Chicago Reader.
With a daily print circulation of nearly half a million, the Sun-Times is the Windy City’s oldest daily newspaper, and serves as the city’s left-leaning rival to the conservative Chicago Tribune.
Wrapports received a nonbinding letter of intent from Tronc Inc., formerly known as Tribune Publishing, with an offer to buy the paper for an undisclosed amount while committing to maintain its independent newsroom.
Tronc also owns the Los Angeles Times, Orlando Sentinel, Baltimore Sun and other local newspapers around the country.
But the U.S. Department of Justice Antitrust Division swiftly opened an investigation, focused on whether the Sun-Times made earnest efforts to elicit reasonable alternative offers.
Beginning with a full-page advertisement in the Sun Times to alert other potential bidders,
the Justice Department oversaw a public sale process that was extended several times.
The Tribune reported Wednesday that its sale closed for $1 after the investment group collected the $11.2 million needed to fund the Sun Time’s projected losses for the next 30 months.
The investment group, led by Eisendrath, is also funded by the Chicago Federation of Labor, other local unions and half-a-dozen other unnamed individuals.
Tronc executive Tim Knight said he was pleased to see the Sun-Times stay an independent voice for the City of Chicago.
“We’re pleased to see that happen and we look forward to the new owners honoring the Chicago Tribune’s contractual agreement for printing and distribution services under the terms of our multi-year agreement,” Knight said in a statement.
The new owners will be responsible for making good on Wrapports’ $25 million-a-year contract with Tronc for printing and distributing the Sun-Times. This business relationship was a major factor in Tronc’s initial bid for its rival.