Archive for Wednesday, April 1, 2009

Sun-Times Media Group files for bankruptcy

April 1, 2009

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— The owner of the Chicago Sun-Times, a storied newspaper once home to legendary columnist Mike Royko and other greats, followed its hometown rival by filing for bankruptcy protection Tuesday — raising questions about whether both can survive in a brutal time for newspapers.

The filing was widely seen as a step toward shutting down a feisty paper known for uncovering city scandals that once went as far as to secretly operate a bar to expose crooked city inspectors.

“We’d be surprised if they are publishing a print daily newspaper by the end of 2010,” said Mike Simonton, a bond analyst at Fitch Ratings. “They’ve been on the clock for over a year now in terms of burning cash and not having really a viable revenue and cost structure to survive in this environment.”

Sun-Times Media Group Inc., which also owns dozens of suburban newspapers, filed for Chapter 11 protection in a Delaware court — the fifth newspaper publisher to seek protection from creditors in recent months. The company listed $479 million in assets and $801 million in debt. The largest unsecured creditors are newsprint vendors; three are owed more than $1 million each.

“Please be assured that this action does NOT mean the Company or our newspapers or online sites are going out of business,” Chairman and Chief Executive Jeremy Halbreich told readers in a statement posted on its newspapers’ Web sites.

Tribune Co., owner of the Chicago Tribune, Los Angeles Times and other newspapers and television stations, filed for bankruptcy protection in December. Analysts say it may not be long before Chicago becomes a one-newspaper city.

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