Tribune Publishing Completes Purchase of Sun-Times Suburban Properties

CHICAGO (Chicago Tribune/MCT) -

Tribune Publishing, parent of the Chicago Tribune, has closed a deal to acquire all of the Sun-Times Media suburban properties from Wrapports.

The agreement, confirmed Friday, brings six daily and 32 weekly suburban newspapers into the Chicago Tribune fold, bolstering circulation and revenue, and significantly expanding its publishing footprint across the Chicago market.

Longtime Chicago Tribune advertising executive Bob Fleck has been named publisher and general manager of the newly acquired suburban newspapers.

As part of the deal, the Chicago Tribune Media Group also announced a long-term agreement to continue printing and distributing the Chicago Sun-Times, which had opted out of its contract last year.

Terms of the acquisition, and the printing and distribution deal, were not disclosed.

Some 143 editorial and advertising employees of the suburban papers, which include the SouthtownStar, Merrillville Post-Tribune, Aurora Beacon-News, Elgin Courier-News, Naperville Sun, Lake County News-Sun and the weekly Pioneer Press newspapers, will become Tribune employees, according to executives.

“We have reach in the suburbs now, but this gives us more reach, deeper reach, with really good brands that we’re acquiring,” said Jack Griffin, CEO of Tribune Publishing. “We think it’s very rational, very sensible and it will be another good test for us and the ability to demonstrate that this kind of activity makes sense for the company and ultimately, our shareholders.”

It also represents a major shift in strategy for the Sun-Times, long Chicago’s No. 2 newspaper, which is yielding huge swaths of its home market to focus on launching a national network of local news websites to be led by Tim Landon, who co-founded careerbuilder.com and cars.com. After the sale, only the core newspaper and the free weekly Reader remain under the Sun-Times Media umbrella.

Chicago-based Tribune Publishing, which includes the Chicago Tribune, Los Angeles Times and eight other daily newspapers, was spun off from Tribune Media in August.

Speculation that the Chicago Tribune’s parent was looking to buy the Sun-Times’ suburban papers surfaced two weeks ago. The blueprint for such a move has been in place since veteran magazine executive Griffin took the helm of Tribune Publishing this year.

Griffin has said strategic acquisitions such as the May purchase of two Maryland newspapers — The Capital in Annapolis and the Carroll County Times, expanding the reach of the company’s Baltimore Sun — may be part of a larger plan to reverse years of declining revenues across the newspaper group.

The acquisition of the Sun-Times suburban newspapers dovetails with that broader strategy, with some market-specific efficiencies baked into the plan.

The Chicago Tribune prints and distributes the Chicago Sun-Times and its suburban newspapers. In August 2013, the Sun-Times executed cancelation clauses terminating the separate printing and distribution deals, which pay the Tribune about $70 million per year, according to sources. The printing cancelation was effective in May, with the distribution deal to end the following year.

The new long-term agreement will keep the Sun-Times as a commercial client, while taking over printing and distribution for Tribune’s newly acquired suburban papers at cost, making them potentially more profitable as well, according to executives.

Suburban newspapers in the Sun-Times Media portfolio total about 60,000 to 70,000 in daily circulation, according to the semiannual report released Tuesday by the Alliance for Audited Media.

Moving that circulation, and those from the newly acquired weekly newspapers, will boost the Tribune, which has an average weekday circulation of 455,125, according to the AAM report. Excluding its branded suburban editions, the Sun-Times itself has a daily circulation that ranges from 196,119 to 223,079 throughout the week.

In the latest report, digital growth did not keep pace with ongoing declines in print circulation for the Tribune and Sun-Times. The shifting of assets may help both newspaper companies build out long-term strategies for growing revenue and readership as they chart divergent digital futures.

Wrapports, an investment group led by technology entrepreneur Michael Ferro, acquired Sun-Times Media for about $20 million in December 2011. That purchase included the flagship paper, seven suburban dailies and 32 weekly newspapers.

In March 2013, longtime suburban editors and staffers were laid off to consolidate operations in its downtown Chicago offices.

On Friday, Ferro said shedding the suburban newspapers will allow the company to focus on its core Chicago newspaper, and its newly launched Sun-Times Network, which will aggregate news content on 70 localized websites across the U.S.

“This transaction allows Wrapports to focus on our international digital strategy and to financially strengthen the Chicago Sun-Times,” Ferro said in a statement. “We will invest in the Sun Times Network … while ensuring the Chicago Sun-Times newspaper remains journalistically independent and on financially sound footing for many years to come.”