Tribune to Buy SouthtownStar and Other Sun-Times Media Suburban Newspapers

posted Oct. 21 at 10:20 a.m.; updated

Tribune Publishing will buy the SouthtownStar and all of Sun-Times Media’s remaining suburban newspapers, sources tell Robert Feder.

The parent company of the Chicago Tribune would acquire the Sun-Times Media suburban titles on a “very aggressive timeline,” according to Feder, who reports that Sun-Times Media staffers are working to make internal system changes by early November to accommodate the transfer.

Wrapports CEO Timothy Knight emailed staff on Tuesday after Feder’s report.

“At present, our parent, Wrapports, LLC, is evaluating a variety of investments to continue to execute our digital strategy and grow the Chicago Sun-Times, one of the country’s great newspapers,” Knight wrote to his staff. “Everything we do is to strengthen the company.”

Michael Ferro and a group of investors formed Wrapports in 2011 to purchase the Chicago Sun-Times and its suburban news operations for $20 million. The company was owned from 2009 to 2011 by the late James C. Tyree, who bought the company after it plunged into bankruptcy. In addition to the SouthtownStar, formed in 2007 from the merger of the Daily Southtown and Star Newspapers and formerly headquartered in Tinley Park, the sale includes the Naperville Sun, the Aurora Beacon-News, the Elgin Courier-News, the Lake County Sun, the Post-Tribune in Northwest Indiana and the 32 weekly Pioneer Press titles in the west and north suburbs.

The suburban papers, acquired in stages from 1996 to 2000, actually made up more than half of the Sun-Times company’s revenue. In the years leading up to 2009’s bankruptcy, Sun-Times leadership structured the company in such a way that suburban revenue and resources kept the flagship Sun-Times afloat.

After Tyree’s death, his remaining investors found they had little appetite for the news business and sold the company to Ferro and Wrapports.

If the sale comes to fruition, Wrapports would retain the Chicago Sun-Times and its free weekly Chicago Reader, as well as its websites.

In May, Tribune Publishing purchased two suburban Maryland newspapers near its Baltimore Sun title. Industry observers saw this as a sign that Tribune Publishing would look to acquire more titles around its eight metro papers, which also includes the L.A. Times, as part of a revenue strategy.

The Sun-Times/Tribune deal reported by Feder would give the Chicago Tribune increased paid circulation and market penetration in many of Chicagoland’s high-end ZIP codes — almost doubling the company’s market presence in some communities — which improves the reach of advertising inserts and display ads. The Tribune also would be able to service the expanded roster of advertising accounts without absorbing additional staff costs on the sales side.

The Tribune began printing the Sun-Times company’s newspapers in 2007 and began distributing them in 2011. Printing and distribution cost about $70 million a year, according to a report in the Tribune.

In August 2013, the Sun-Times reportedly served a two-year notice required by contract to terminate the printing and distribution deal.

What would happen to the various suburban titles? Would they stand alone or would the Tribune fold them into its suburban editions? And would the Tribune pull the suburban newspapers’ websites behind its paywall?

Last year, Sun-Times Media sold its suburban newspaper buildings, executed layoffs and transferred remaining production staff to the downtown Sun-Times newsroom. Presumably, many of the employees involved in newspaper production will face layoffs if and when this sale is executed.

The SouthtownStar building in Tinley Park was sold to Menards, which renovated the building and turned it into the largest Menards Home Improvement Store in North America. Also last year, the company sold the Joliet Herald-News to Shaw Media. At the time, the Sun-Times was said to be shopping around its other titles.

How does this sale strengthen the Sun-Times? A source speculated on that in a Tribune story.

“If they’re doing this correctly, it should allow them to stabilize the Sun-Times and not have the distraction that has always been there with the suburban papers. It also streamlines and clarifies renegotiations for the printing and distribution agreements,” the source said. “This should serve to make the Chicago Sun-Times even more viable going forward. It’s potentially a big win-win for both sides.”