So what happens if Tribune does buy Sun-Times' suburban newspapers

Oct 22, 2014 23:21

I would normally loathe to do three Sun-Times related posts in a row - two of them in one day, no less. But I only have so much free time, and there's only so long I can delay posting this before it becomes hopelessly out of date.

Which is to say - if I wasn't busy, I would've posted it yesterday.

Anyway...
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On Monday, long-time Chicago media reporter Robert Feder dropped a bombshell on his blog - that rumors strongly indicated that Wrappots intends to sell all of Sun-Times Media's suburban newspapers to Tribune Publishing.

As you may recall from my earlier entries on Sun-Times Media/Wraports, the company currently owns four daily news
papers (Chicago Sun-Times, Lake County News-Sun, [Northwest indiana] Post-Tribune and Southtown Star), two Sunday-Friday western suburban newspapers ([Aurora] Beacon-News and [Elgin] Courier-News), one newspaper that comes out three times a week (Naperville Sun), an alternative weekly newspaper (Chicago Reader) and 32 weekly suburban newspapers published by Pioneer Press. The company sold one of its suburban daily newspapers (the [Joliet] Herald-News) at the beginning of this year.

According to Feder, Wrapport plans to keep Sun-Times and the Reader and sell everything else to the Tribune.
When it comes to media rumors, Feder is rarely wrong. Even when something doesn't pan out, it's usually because negotiations broke down/people changed their mind rather than because there was no substance whatsoever. So Chicagoland media is taking this seriously.

Later that day, Feder got an internal e-mail from Wrapports CEO Tim Knight - and it didn't exactly sound like a denial (emphasis mine)

I know you’ve seen the speculation about the sale of some Sun-Times Media titles. We don’t comment on rumors but I want to assure you that everything we do is to strengthen the company.

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.

What I know for sure is that we are entering one of the busiest seasons of our year. I appreciate all of your hard work and continued focus on our readers, advertisers and partners.

The sale would reshape the Greater Chicagoland media market in a pretty fundamental way. Chicago Tribune has a pretty sizable presence in the area - in my personal experience, you can buy a copy as far north as Racine, Wisconsin, as far west as Plano, as far south as M anteno and as far east as Michigan City, Indiana. Chicago Sun-Times' reach isn't quite as extensive, but it's still fairly sizable.

But the difference between the two is that Sun-Times built up an extensive network of newspapers in medium-sized cities and small towns and villages throughout the region. Tribune never really bothered until recently, when it launched TribLocal. The TribLocal newspapers tend to be smaller than what Sun-Times Media put out. The company scaled back on TribLocal since Journatic scandal broke out over two years ago. In Northwest suburbs, at least, it seemed to pull back from municipalities that had Pioneer Press newspapers and focused on the ones that didn't.

If Tribune buys the suburban newspapers, it would not only beef up its local suburban presence, but it would take away what is, in many areas, is its biggest competition. The media would still be competitive - we'd still have the Daily Herald (the major daily newspaper in northern, northwestern and western Chicagoland suburbs), Shaw Media's growing network of weekly and daily newspapers, 22nd Century Media's growing network of weeklies. Smaller companies like northwestern suburbs' Journal & Topics newspapers and largely southwest suburban Voyager Media will find itself facing a company that is making profit and has more money at its disposal. And there are always local newspapers like the Hinsdalean and Evanston Roundtable that will keep doing what they're doing - they are used to competing against Pioneer Press and other heavy(er)weights, and the change of owners probably won't affect them much.

There are also implications for Tribune and Sun-Times as newspapers. As you may recall, Sun-Times Media has been propping up its circulation figures by combining the figures for all of its newspapers. The circulation figures are important, since (at least in theory) it indicates how many people read the paper and, thus, how many people would see the ads. The bigger the circulation, the more enticing it is to advertisers.

Sun-Times Media as a whole has a bigger circulation than Chicago Tribune. But if you take the suburban newspapers out, Tribune is clearly in the lead.

But for people who work for newspapers that are up for sale, the big question is, as my mom put it - who are they going to fire? As you may recall, when Tribune's Baltimore Sun bought Baltimore City Paper, the first thing they did was fire everyone (and only rehire some people back). That's a different part of Tribune Publishing, but still... One wonders.

A follow-up article by Crain's Chicago Business has some interesting titbits. One, there is the not so small matter of the Chicago Newspaper Guild. All of the Sun-Times newspapers that are for sale have union reporters, editors and photographers/videographers. Chicago Tribune never had unions, and the Republican newspaper was never too terribly keen on them. So what happens once the sale is complete?

The Chicago Newspaper Guild, the union that represents a whittled-down workers' group of 75 editorial staffers at the Sun-Times papers, told members in a note today that a sale of the suburban papers is being considered. The union is meeting with Sun-Times management tomorrow to discuss more details. “I believe if a sale takes place, there would be a smooth transition and our various suburban contracts would be honored, but meanwhile myself and your executive board will remain vigilant during this process due to the obstacles we've had to overcome in the past,” David Pollard, president of the union, said in the note to members.

Another interesting bit that came out of the article is that the suburban newspapers are, apparently, doing better financially than Chicago Sun-Times. While the consensus has been that Sun-Times Media as a whole is losing money, Chicago Reader makes profit and Chicago Sun-Times breaks even (barely), there was no real info on where the suburban newspapers fit into all of this.

I suppose that's good news for Tribune.

Crain's also speculated on Sun-Times Media's future, wondering how it would survive - and what would happen if Chicago Sun-Times would go digital-only.

The Chicago Sun-Times could follow through on Mr. Ferro's pledge of a “digital” future by making the paper into what its front page already proclaims is “ChicagoSunTimes.com,” no paper needed, but it would still be difficult to make ends meet financially, [media consultant Ken Doctor] said. A digital-only product would require significantly paring the newspaper staff to reduce costs to a level that could be supported by all-digital subscriber and advertising income, he said.

“You would still have to have major cuts in a newsroom to get to all digital, and then you wouldn't be a major presence in the Chicago area,” Mr. Doctor said.

The best hope might be if Wrapports investors, including wealthy Chicagoans such as Morningstar Inc. CEO and billionaire Joe Mansueto, decide to keep plowing more money in the Chicago Sun-Times despite its financial condition. But some of the investors have indicated that that's not likely after pledging $80 million already. About three-quarters of that amount has already been spent, one source said. Of course, Wrapports would get a one-time cash infusion from the sale of the suburban papers.

Chicago Tribune media columnist Phil Rosenthal also weighed in, commenting that, while larger circulation can help newspapers, printing and delivering them costs money. It may be that, for Wrapports, the cost was starting to outweigh the benefits.

Rosenthal's piece also suggested that if Tribune did buy the suburban papers, it would be willing to keep printing them - at least in the near future.

Jack Griffin, chief executive of Tribune Publishing - the company that emerged earlier this year from a division of the old Tribune Co., separating it from the broadcasting-oriented Tribune Media - shares that vision to an extent. He has made no secret of his ambition to position the newspaper company for an increasingly digital marketplace. But he also has pointed to the continued role of established print titles and their standing in their respective communities in doing so.

But there is one part of the column that made me puzzled.

Although the suburban titles increase the Chicago Tribune's already substantial footprint in the Chicago area, combined with RedEye and Hoy and other print-digital brands, Wrapports' shedding them would leave its suburban readers with no choice but to connect digitally.

To me, that doesn't really make sense. If Tribune buys the papers and keep putting them out, people will keep reading them. When Herald-News was sold to Shaw Media, subscribers kept getting the paper, and while it wasn't available for sale at the same locations as before, it was still possible to buy it stores or through newspaper boxes. And while Herald-News' Sun-Times Media website was nuked within days, Shaw Media took over the domain name and built a new website in its place.

If Wrapports actually thinks that shedding the newspapers would drive people to their digital product - which I honestly don't think they do - than they're in for a disappointment.

wrapports, business, journalism, newspapers, sun-times media, chicagoland

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