Chicago can support both the Sun-Times and the much-bigger Chicago Tribune, he declared in a wide-ranging interview Wednesday, a day after STMG announced Chicago businessman James Tyree had assembled a small group of investors that have offered to buy the chain of 58 papers for $5 million in cash and more than $20 million in assumed liabilities.
?They are very different newspapers in a very large metropolitan area that appeal to different audiences,? Halbreich said.
The Texas native who served as president of The Dallas Morning News compared the Tribune to his old paper. ?It is the institutional paper of record, whereas the Sun-Times is the heart and soul of the city, much more locally focused.?
Halbreich also said that in the five of the last six quarters, STMG newspapers have gained advertising share on both the Tribune and the Daily Herald, the suburban Paddock Publishing paper that is Illinois? third-largest: ?We have gained ground, and we?ve done that by being much more aggressive than the Tribune or Daily Herald, and being more innovative in restructuring the business."
Nevertheless, the papers are still losing money, though Halbreich said the rate at which it is burning through cash is slowing. In July, according to the most recent filing in its bankrutpcy case, STMG burned through $3.8 million and had $19.3 million in cash on hand. But now, Halbreich said the rate has slowed to about $200,000 to $300,000, excluding expenses relating to its bankruptcy. The group expects to stanch the negative cash flow in the fourth quarter of the year.
The new owners are asking union workers to accept indefinitely the 15% wage cut to which they agreed last spring. The cut was supposed to be restored when the company changed ownership.
Halbreich said the investor group, which has asked him to stay on, have committed and raised ?significant additional resources? to invest in new equipment such as advertising and editorial front-end systems, as well as narrower web widths.
One area where STMG is not likely to cut is in the frequency of its dailies, Halbreich said Wednesday. When he first took the job as chairman and interim CEO in the wake of a shareholder revolt that ousted turnaround specialist Cyrus Freidheim, Halbreich had mused about cutting the frequency of the group?s suburban dailies, several of which circulate quite close to each other.
?In theory, [cutting frequency] is always on the table,? he said, noting that earlier this year STMG?s Southtown Star did drop its Saturday edition when it converted to tabloid. ?But as I sit here today I don?t see anything else happening along those lines. Philosophically, these are daily newspapers.?
By: Mark Fitzgerald Once Sun-Times Media Group (STMG) is out of bankrutcy and under new ownership, Jeremy L. Halbreich expects to continue as its chairman -- and he expects the flagship Chicago Sun-Times to continue on as well.