In an unprecedented maneuver to try and “secure the future” of one Chicago’s two daily newspapers, Chicago Public Media’s board of directors voted Wednesday to pursue an acquisition of the Chicago Sun-Times.
In a joint statement from both news organizations released Wednesday evening, the board also announced it was naming Matt Moog the new CEO of Chicago Public Media, after he had served nearly a year as interim, ending a two-year-long search for a new top exec for the public media company.
The board approved a “non-binding letter of intent” to pursue the deal, which — under a final agreement — would make the Chicago Sun-Times a subsidiary of Chicago Public Media, the joint statement said.
The two brands would “create one of the largest local nonprofit news organizations in the nation and be a national model for the future of local journalism.” But the statement said the two news brands, WBEZ and Sun-Times, “would continue to serve their respective audiences.”
Moog said in an interview that the board’s vote allows the organization to move forward with the deal, one he hopes will be given final approval by both news organizations by the end of the year. Moog said he didn’t believe the plan needed any outside or regulatory approval.
The deal would give Chicago Public Media a potentially wider reach across all the platforms, Moog estimated.
“This is an investment and growth opportunity. We are looking to build our staff, we’re looking to build the audience, we’re looking to invest in the journalism,” Moog told WBEZ in an interview. “All of that is focused on making sure that we serve an expanded and engaged diverse audience that is representative of the community that we serve.”
Sun-Times CEO Nykia Wright, who keeps her position under the proposed deal, said she believed the acquisition will set an example for local news organizations across the country.
“If we do this correctly, not only will it have a significant impact in the Chicago community, but I really do believe it will have ripple effects across the nation,” she said. “We’re not talking about reduction. We’re talking about expansion and that’s one of the most exciting things to come out of journalism in at least a decade.”
Wright said she did not expect layoffs at the Sun-Times because of this deal. When asked the same question, Moog said job security for employees at both organizations is of the highest priority.
Funding would come in part from major philanthropies
Chicago Public Media’s board approved the deal in a closed-door meeting Wednesday evening.
The two companies would share content from both newsrooms across their platforms, including broadcast, print, podcasts and public events, the joint statement indicated.
The statement indicated too that funding would come through public appeals for donations to fund the non-profit venture, but could also include funding from major philanthropic organizations.
“In addition to Sun-Times investor Michael Sacks, other organizations who have stepped forward with early and enthusiastic support are the John D. and Catherine T. MacArthur Foundation and the Pritzker Traubert Foundation,” the statement read.
Moog would not disclose how much financial support the foundations are providing as part of the deal, and would only say that the “foundations named have really stepped up in a significant way.”
“It’s a national model for funding the future of local journalism that we will be out talking to other foundations and philanthropic donors about making sure that we have the resources to not just survive but to invest and to grow,” he said.
News of the potential deal was first reported by media columnist Robert Feder.
Moog and Wright then both confirmed the potential for the deal in emails to their staff, but both executives had said the deal was far from done, and wrote they both believed the protection of jobs within the newsrooms was important.
Moog, a tech entrepreneur who had served on the organization’s board, became interim CEO of Chicago Public Media in October 2020. He took the interim role after a permanent choice for the position withdrew her acceptance amid questions about how she handled misconduct allegations at her previous employer.
But the search for a new CEO stalled amid the pandemic. The naming of Moog to the position apparently is ending that search.
As legacy media struggles, the potential for a new model
The model the two organizations are aiming for — a legacy paper and public radio station operating under one non-profit umbrella — would be the next iteration of what has been a nationwide slow movement of newspapers maneuvering toward non-profit status.
The Philadelphia Inquirer is now a public benefit corporation owned by the nonprofit Lenfest Institute for Journalism. That status means the company prioritizes its mission to provide a public benefit, while still seeking to make a profit. The Lenfest Institute can provide grant funding to the paper, in addition to any other organizations it chooses.
Wednesday evening, the CEO of the Lenfest Institute, Jim Friedlich, said that his organization has been advising Moog and Chicago Public Media’s board on the proposed deal. He said that in Philadelphia, he’s been able to leverage the institute’s non-profit status to appeal to foundations to support more investigative news, greater diversity and digital products.
“(Chicago’s) news capacity has been ravaged over the years by out-of-town hedge fund owners, the secular decline of print, and a failure to invest in the digital transformation of local news products,” Friedlich wrote. “Today’s announcement is wonderful news and a model for other public media and local newspapers to emulate.”
The Sun-Times has a long history of financial struggles and shifts in leadership as it has changed hands numerous times. The company filed for bankruptcy protection in 2009, as it and other newspapers struggled to find financial footing amid declining revenue in advertising and print sales. Later that year, the paper was rescued from bankruptcy by an investment group led by James Tyree for about $25 million, $5 million of which was in cash, and the rest in absorbing the company’s liabilities.
Just a few short years later, in 2011, Tyree died and the paper was turned over again, this time to a new company called Wrapports, LLC, led in part by entrepreneur Michael Ferro.
Potential merger deals with other major media players came and went over the years. In May of 2017, when the Sun-Times was reportedly losing $4.5 million a year, Ferro, who had by then divested from the Sun-Times and was chairman of Tronc — which owned the Chicago Tribune at the time — led a new push to acquire the paper.
But regulatory issues got in the way, when the Justice Department’s antitrust division raised issues about the consolidation of two major newspapers in the same town. In July 2017, the Sun-Times instead was sold to a group of investors, including a former Chicago alderman, reportedly for $1.
While she wouldn’t share details with WBEZ about the current financial state of the Sun-Times, Wright said that the newspaper’s losses have decreased and it’s in a better financial situation than it had been.
Wright told WBEZ that if the Chicago Public Media board ends up rejecting the final acquisition, the Sun-Times would continue as an independent entity “with the backstop funding that we have been used to receiving.”
“It’s not a fire sale. It is a thoughtful, strategic opportunity to underwrite and expand journalism in Chicago,” Wright said.
Tony Arnold covers state politics for WBEZ. Follow @tonyjarnold.