3 Min Read
(Reuters) - A group of investors led by a former Chicago alderman has purchased the Sun-Times newspaper, outbidding the owners of the Chicago Tribune for its main rival and ending a federal antitrust investigation into the sale.
Former Chicago Alderman Edwin Eisendrath and the group of investors beat out Tronc Inc (TRNC.O), the owner of the Chicago Tribune as well as the Los Angeles Times and Baltimore Sun, for the tabloid, the Chicago newspapers reported on Wednesday.
"It's a great town as you know and it will continue to have two great newspapers," Eisendrath said on Twitter.
The U.S. Department of Justice's Antitrust Division opened an investigation in May into the possible sale of the Sun-Times to Tronc and monitored the bidding closely.
The department said in a statement on Wednesday it closed its investigation with the paper's sale to ST Acquisition Holdings LLC, the investor group.
Terms of the deal between ST Acquisition Holdings and Sun-Times parent Wrapports LLC were not made public.
The investor group is comprised of corporate restructuring expert William Brandt, the Chicago Federation of Labor, local labor unions and about a half-dozen other individuals, the Sun-Times reported.
Criminal defense attorney Len Goodman, a member of the billionaire Crown family, was said to be the biggest individual investor among the group, Crain's Chicago Business reported.
Labor unions in the city applauded the sale, which also included the Chicago Reader, a weekly.
"The little guy won here," said Chicago Federation of Labor President Jorge Ramirez to the Sun-Times.
Wrapports has an annual $25 million contract with Tronc to print and distribute the Sun-Times. The contract is a major source of revenue for Tronc and one of the reasons it wanted to purchase the newspaper, the Sun-Times reported.
"tronc will move ahead with our plans to execute growth strategy, leverage technology and increase the digital audience of our award winning journalistic brands,” Tim Knight, president of troncX, said in a statement on Wednesday.
The company expects the new Sun-Times owners to honor the printing and distribution deal, Knight added.
The deal could usher in different models to fund newspapers, said Merrill Brown, founder and principal at MMB Media, citing how billionaire H.F. “Gerry” Lenfest launched an institute to fund newspapers such as the Philadelphia Inquirer.
"Also it wouldn't be surprising to see, given who these folks are and their political leanings, that they might create a left-leaning paper," he said on Thursday of the new Sun-Times owners.
Reporting by Brendan O'Brien in Milwaukee, Timothy Mclaughlin in Chicago and Jessica Toonkel in New York; Editing by Muralikumar Anantharaman and Matthew Lewis