September 4, 2009

Investors may rescue Chicago Sun-Times

The bankrupt Chicago Sun-Times may have found a rescuer if union workers agree to long-term pay cuts, a source close to the deal making said.

The source said Chicago businessman Jim Tyree, chairman of Mesirow Financial Holdings Inc., had assembled a group of investors to bid on the Sun-Times, which filed for bankruptcy at the end of March.

After the Sun-Times filed for protection, unions agreed to a 15 percent pay cut to keep the newspaper in production. The source said a deal to resuscitate the company was contingent on unions agreeing to make the pay cut permanent, The Chicago Tribune reported Friday.

Sun-Times Media Chairman Jeremy Halbreich reviewed the deal with union leaders Thursday, but would not make a public comment, the Tribune said.

In May, Tyree said, you ought to be able to make money at that, referring to the newspaper's revenue of well over $200 million.

The source said the new deal involved breaking Sun-Times Media into good and bad companies.

The bad company would absorb a $600 million tax liability. The good company would include the profitable community newspapers and Sun-Times Web site.