Once sought by Tronc Inc., the Chicago Sun-Times will now be acquired by an investment group led by unions and a former politician.
Chicago Sun-Times, founded in 1948, was previously owned by Wrapports LLC, a local investor group formerly led by Tronc chairman Michael Ferro.
The deal also includes Chicago Reader, an alt-weekly newspaper.
The investment group that will buy Chicago Sun-Times includes ST Acquisition Holdings LLC, led by former Chicago alderman Edwin Eisendrath, and a group of labor unions under the Chicago Federation of Labor.
Corporate restructuring expert William Brandt is also part of the group, as well as other unions and a few more individuals. Eisendrath told media sources he was not at liberty to give any more names.
“Our investors include more than half a million hardworking people around Chicago, and you can bet we’ll be talking with a voice that resonates with the working class,” Eisendrath told the Chicago Sun-Times. “We’re going to organize around that to raise circulation.”
The investment group beat a competing bid from Tronc, the owner of the Chicago Tribune, the city’s leading newspaper.
The Justice Department's antitrust division, which is responsible for investigating newspaper mergers, intervened when Tronc made moves to acquire the Chicago Sun-Times. The Justice Department saw Tronc’s potential ownership of the top two newspapers in Chicago as a threat to competition in the city, which is one of the last few remaining two-paper towns.
DOJ required the Sun-Times to publish an ad seeking other buyers for Wrapports’ assets, with the understanding that if no other buyers stepped forward, Tronc would be able to acquire the company.
Eisendrath’s group won over the Justice Department by securing more than $11.2 million in operating funds to run the newspapers for a determined length of time.
“It’s a worthwhile challenge,” Brandt told the Sun-Times. “It’s a money-losing venture, but this is one of those things where you take a gulp — and you do it for the good of the city. Chicago needs two newspapers.”
However, the Sun-Times and Tribune already do business together. The Tribune prints and distributes the Sun-Times as part of a $25 million a year deal. In 2014, Tribune acquired Wrapport’s network of Sun-Times' community newspapers.
Ferro became chairman of Tronc and its largest shareholder in February 2016.
Last year, Ferro donated his shares in the Sun-Times to a charitable trust as part of the move to take over Tronc, which was then known as Tribune Publishing.