A second major shareholder of the Sun-Times Media Group is calling for the ouster the head of the embattled publisher, while asking the company to also replace members of its board.
In a letter Monday, K Capital Management portfolio manager Abner Kurtin said the newspaper group’s board and chief executive have failed to curtail cash loss.
“The current regime of Sun-Times Media Group has overseen a period of substantial loss of value on both an absolute and industry relative basis,” he wrote. “K Capital believes a change is needed if this business has any chance of surviving.”
K Capital Management owns a 10.5 percent stake in the Chicago-based newspaper company.
Kurtin’s note comes less than two weeks after another leading shareholder, Davidson Kempner Capital Management LLC, called for the ouster Chief Executive Cyrus Freidheim Jr. and the replacement of some members of the seven-person board.
That group holds a 5.9 percent stake in the Sun-Times.
Sun-Times Chairman Raymond Seitz responded to that request in a letter Friday, saying the owner of the Chicago Sun-Times and dozens of other community papers was already eyeing a plan to restructure — and possibly downsize — the board and had identified four potential new directors. It was also vetting others.
“Our goal is to identify persons who know the Chicago market and are experienced in the media industry, as well as possibly having an interest in investing in the company,” Seitz wrote. “It was and remains the board position that it may be appropriate to restructure the board over the course of the next few months so that a renewed (and perhaps smaller) board may guide the company through the difficulties it faces in 2009.”
The Sun-Times said last week that it lost almost $170 million in the third quarter. The loss was an improvement over last year’s results, but wasn’t enough to keep the company from announcing another massive round of cost cutting brought on by still-falling advertising revenue.
Sun-Times shares rose a penny, or 9.1 percent, to 12 cents per share in Monday trading.