By: E&P Staff
The Chicago Sun-Times will go into the black by the end of the year, according to a Lazard Ltd. document prepared for potential bidders for the tabloid and its nearly 100 Chicago-area papers and media properties.
The document was obtained by Chicago Tribune media columnist Phil Rosenthal, who wrote about it for Tuesday’s editions.
“The purchase of [the Chicago Sun-Times] represents a one-off opportunity to acquire a national and local newspaper icon,” Rosenthal quoted the memo as saying. “The rarity of such a prestigious asset offers a purchaser the chance to step into one of America’s largest and most attractive markets and capitalize on a highly visible brand to further expand throughout the region.”
Lazard is advising the newspaper’s parent Sun-Times Media Group as it explores strategic alternatives to push up its flagging stock price, including the sale of all or part of the company.
The six-page document, which is not as detailed as a formal offering memorandum, says the company will return to profitability in 2008. Since December, it has wrung nearly $50 million in costs by layoffs, folding and consolidating newspapers, outsourcing its circulation to the rival Chicago Tribune, and other means.
The memo says the flagship Sun-Times, the Post-Tribune in Gary, Ind., and its community newspaper publishing units Suburban Pioneer Newspapers and Midwest Suburban Publishing all have the “potential for strong free cash flow growth upon cyclical recovery.”
The memo also touts the Sun-Times’ personality-driven journalism. It cites 10 staffers specifically, Rosenthal said, including its three Pulitzer Prize winners, movie critic Roger Ebert, photographer John White and editorial cartoonist Jack Higgins. Also mentioned are the columnists Richard Roeper, Rick Telander, Mary Mitchell, Robert Novak, Michael Sneed, Jay Mariotti and Stella Foster.
Sun-Times Media Group (NYSE: SVN) ended trading Monday unchanged at 70 cents. It has been suspended from floor trading by the New York Stock Exchange, and warned that it risks delisting because its stock has traded below $1 for more than a month, and its market capitalization — an indicated $56.2 million Monday — falls short of the exchange standard for listing by nearly $20 million.