'Sun-Times' Bidder: Guild Vote Imperils Sales Deal

By: E&P Staff In its first formal reaction Wednesday to the overwhelming rejection of its contract concession demands by unionized newsroom employees at the Chicago Sun-Times, the investor group offering $25 million for its parent chain said it would not be able to go through with the deal without "drastic changes," including elimination of seniority and work rules.

"Without these changes, our investors, led by [Chicago financier] Jim Tyree, would not be able to move forward with their plan to absorb significant projected initial losses and invest more than $25 million in capital to create the self-sustaining enterprise that they envision," the bidders, known collectively as STMG Holdings LLC, said in a statement.

The group, whose other members have not been identified, said it was "disappointed" by the 83-22 vote of the Sun-Times' Chicago Newspaper Guild unit to reject Tyree's proposed new agreement, which the union said "guts our contract and takes away most rights that protects our members."

Tyree's group is asking all unions at Sun-Times Media Group newspapers to extend a 15% compensation cut negotiated earlier this year for the next three years. It also would allow for layoffs and reassignments without regard to seniority or "bumping rights," and allow management to assign union members or non-union members to virtually any work at the paper.

"We believe that the seniority and work rule changes and cost saving measures proposed by the company's current management are vital to save the Sun-Times News Group Newspapers and Web sites, including the Chicago Sun-Times," STMG Holding's statement said. "Although we understand and respect the Chicago Newspaper Guild's difficult decision, the investors of STMG Holdings have determined, after five months of intensive review, that any successful business plan would require drastic changes to the current business model, including the cost-savings and flexibility sought through the amendments current management is seeking from the Guild and all its other unions."

The Sun-Times Guild unit said it wants to sit with Tyree to discuss the demands. Tyree has set a Sept. 29 deadline for unions to agree to the contract changes.

Votes by Guild units at other Chicago-area newspapers are scheduled for Wednesday night and Thursday night.