Coy, cagy media folks often resort to vagueness when they don’t want to talk about money, e.g., “six figures,” “seven figures” and so on. However, the system breaks down with deals for distressed media properties, as “one figure” doesn’t really leave much room for the imagination.
Still, that is the price range for last week’s sale of Chicago Sun-Times by publisher Wrapports, LLC. It was acquired by an investment group led by Chicago alderman Edwin Eisendrath for the grand sum of $1. (The newsstand price for a single copy of the newspaper.)
That's according to a report published by the newspaper, citing an unnamed source familiar with the deal. The deal also includes the Chicago Reader and the weekly’s syndicated “Straight Dope” column. Both are being absorbed into Answers Media, a multimedia production company simultaneously acquired by Eisendrath.
In fairness, that’s not the only financial commitment made by the buyers.
As in a number of similar deals in recent years, the investment group, which includes several labor unions, agreed to assume an unspecified amount of debt. It also agreed to pony up $11.2 million in operating funds to demonstrate their intention to keep the newspaper a going concern.
The symbolic price tag is reminiscent of a number of other deals over the last decade.
In 2008, Macrovision sold TV Guide magazine, then said to be losing $20 million per year, to OpenGate Capital for $1. (It further agreed to loan the buyer $9.5 million on attractive terms to help the deal alongs) In 2010, The Washington Post Co. sold Newsweek to Sidney Harman, a stereo magnate, for $1 along with the assumption of financial liabilities to the tune of $47 million.
Also in 2010, buyers associated with the Rev. Sun Myung Moon purchased The Washington Times for $1, returning the conservative newspaper to the control of News World Media, a company backed by the reverend’s Unification Ministry.
More recently, in March 2015 Cablevision offered a preliminary bid of $1 for the New York Daily News, which was said to be incurring losses of up to $30 million a year. The offer proved too much for the company, which backed out of the deal several months later.
The sale of the Chicago Sun-Times to the local investment group marks a reversal for Tronc, publisher of the rival Chicago Tribune, which initially announced its intention to buy Wrapports in May. Wrapports was previously owned by Michael Ferro, who gave up his control of the Sun-Times when he acquired a controlling stake in Tronc (then Tribune Publishing) last year.
However, he later pursued a plan to bring the two newspapers together under unified corporate ownership. The prospect of consolidation between two big metro dailies triggered an automatic auction, supervised by the Department of Justice. Competing bids were solicited.
Eisendrath formed ST Acquisition Holdings, backed by the investment group, to deliver the rival bid.