Chicago Public Media’s new permanent CEO, Matt Moog, offered new details Thursday about how an ambitious plan to acquire the Chicago Sun-Times would be financed, saying the organization could lean on substantial multi-year commitments from three major funders, as well as build on the subscription model of the legacy paper.
With questions raised by staff about the financial feasibility of taking on the Sun-Times, which has suffered financially in the past as have most legacy newspapers, Moog said key to the deal is the financial support of three major funders — Sun-Times investor Michael Sacks, the MacArthur Foundation and the Pritzker Traubert Foundation.
“I can’t give you specific amounts but what I can tell you is we have three commitments that are significant multi-year commitments and they are larger than any commitments we’ve ever received in our history,” Moog said on Thursday morning to current Chicago Public Media staff who raised concerns about the lack of financial transparency behind the deal.
A spokesperson for Sacks did not comment. The Pritzker Traubert Foundation did not respond to requests for comment.
MacArthur’s president, John Palfrey, posted a statement to the organization’s website Thursday praising the potential deal, but the organization didn’t address how much money it committed to the deal or for how long.
“MacArthur is excited to be an early supporter of this joint effort between Chicago Public Media and the Chicago Sun-Times,” Palfrey said. “As a longtime journalism and media funder, we are pleased to see emerging models devoted to addressing the crisis in the news media business and the significant challenges facing our democracy today. We hope these promising models result in stronger news organizations with more diverse staffs that do a better job of covering all communities.”
The deal won initial support from Chicago Public Media’s board of directors Wednesday evening. If the deal is finalized, the Sun-Times would be become a subsidiary of Chicago Public Media, which oversees a flagship public radio station, WBEZ, and sister station Vocalo.
But when asked about potential structural changes to WBEZ or the Sun-Times, and how the two newsrooms may in the future be combined, Moog and other newsroom leaders told the staff that plans were still in development. Moog also told staff that the two news organizations had been under a non-disclosure agreement “for a long time” which prohibited him from talking about the potential acquisition before the board vote.
The Sun-Times, a private company, does not have to disclose its current financial picture and Moog would not present any details as to whether the newspaper currently carries a substantial amount of debt or to what extent the paper is operating at a loss.
But Nykia Wright, the current Sun-Times CEO who will remain in that position under the proposal, told WBEZ Wednesday that the company’s been running a more stable operation recently than it has in decades.
“We are on a much stronger financial footing than we have been in possibly two decades,” Wright said. Moog pitched the acquisition as an opportunity for Chicago Public Media to have a wider reach in the Chicago area, saying he envisions stories being shared across platforms for both news organizations.
But even as he stressed exposing the journalism created under the new Chicago Public Media to a bigger, broader, more diverse audience, he said he anticipated the Sun-Times paywall and subscription model would remain. Moog said other public broadcasting outlets have found ways to monetize some content, and said he believed there were opportunities for Chicago Public Media to do the same.
But he added that the company would still find ways to make content available to those who couldn’t afford paying for it. Currently, Sun-Times news stories are behind a paywall but WBEZ’s are not.
“The long term plan here, which is established across the country…is to build a digital subscription business,” Moog told staff. “I think everybody that’s looking at the decline of local newspapers and looking for a sustainable way forward recognizes that that is the path forward. This is no exception. So the long term plan is to build a compelling digital subscription product that will sustainably fund the organization going forward.”
In meetings held throughout Thursday with staff, reporters and editors alike asked about the future of their positions and the possibility that the potential eventual merger of the two major newsrooms would lead to fewer jobs. Both Moog and Wright have said they have no plans for layoffs, even as coverage of government institutions among the two newsrooms may overlap.
“There are no plans — categorically, no plans — for layoffs,” Moog said on WBEZ’s Reset.
There is precedent for legacy newspapers to turn to non-profits as a business model.
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.
However, even in that instance, management reportedly sought buyout packages from 30 union members three years into the arrangement.
Moog and newly appointed board chairman Piyush Chaudhari also faced questions about Moog’s abrupt and surprise appointment to the permanent CEO position. Moog, a tech entrepreneur with a long history on the organization’s board, had been interim CEO for a year after a previous CEO search ended with the top candidate withdrawing her acceptance amid questions of how she handled misconduct allegations at her previous employer.
Staff pointed out that after that search failed, employees had been repeatedly told there would be a new wide-ranging and inclusive search, which would allow staff’s input and with a focus on diversity.
“Matt is extremely well-positioned to lead the organization going forward,” Chaudhari said, who also emphasized continuity in leadership during the likely upcoming transition.
Both the Sun-Times and Chicago Public Media’s news staff are unionized, albeit members of different unions.
After current staff peppered Moog with questions as to what the organizations gain from such an arrangement on Thursday morning, Chicago Public Media’s SAG AFTRA union leadership reserved judgment on the proposed acquisition, which still needs final board approval.
“We have not been provided enough information to comment on the substance of the plan,” Chicago Public Media’s union leadership said in a statement Thursday. “We hope that as the leaders of these organizations proceed, they listen to and are transparent with the journalists and the public who care deeply about the city and the need for it to have vibrant, varied news organizations.”
Likewise, leaders of the Sun-Times Guild cited a lack of details behind the proposal in a memo to its members on Wednesday.
“We will be strongly advocating on behalf of our members as this progresses and will stay vigilant in ensuring our rights are protected,” the statement read.
Despite the uncertainty among staff, Moog emphasized that he is bullish on the arrangement, emphasizing this business model as one that would set an example for funding sustainable local journalism in the face of a rapid decline in the industry and in Chicago in recent years.
“I really felt like it was the stars aligning on several different fronts,” he said on a staff call. “Ultimately the end goal here is the impact, and the impact to me is measured by both the size of the audience, the engagement of the audience and the diversity of the audience.”
Moog has said he hopes to get final approval for the deal from both news organizations by the end of the year.
Tony Arnold covers Illinois politics for WBEZ. Follow him @tonyjarnold.