Chicago’s two daily newspapers may have moved a step closer to common ownership Thursday with the stunning announcement of a $44.4 million investment in Tribune Publishing by Michael Ferro, a principal owner of the Sun-Times.
With Ferro’s Merrick Media becoming the largest shareholder of Tribune Publishing stock and Ferro being named non-executive chairman of the board, the eventual merger of the Chicago Tribune and the Sun-Times would appear inevitable.
Chicago Tribune Media Group has been distributing the Sun-Times since 2007 and printing the Sun-Times since 2011, both under long-term agreements. In 2014 Chicago Tribune Media Group acquired all 38 suburban daily and weekly newspapers owned by Sun-Times parent company Wrapports LLC.
For now Ferro is stepping down as chairman of Wrapports and relinquishing all operating involvement with the Sun-Times. While he will continue to be Wrapports’ largest investor, the Sun-Times will be put into a holding company, to be chaired by investor Bruce Sagan. Wrapports, to be chaired by investor John Canning, will maintain ownership of the Chicago Reader, Splash, High School Cube and other properties.
The Tribune Publishing announcement Thursday focused on Ferro’s investment supporting the company’s plans to pursue “strategic acquisitions and digital initiatives.” It made no mention of the Sun-Times as a possible acquisition.
“I am excited to be working with the company’s award-winning brands,” Ferro said in a statement. “I see tremendous upside to create value and put Tribune Publishing at the forefront of technology and content to benefit journalists and shareholders.”
A self-styled tech entrepreneur, Ferro has been a controversial figure since he acquired the Sun-Times in December 2011. While failing to improve the paper’s digital presence, he has made drastic cuts to the print product and editorial operation. Once a lightning rod for criticism, Ferro more recently has lowered his public profile and distanced himself from the Wrapports brand. In 2015 he took his name off the editorial masthead of the Sun-Times.
“As nutty and crazy as he is, Ferro has kept the Sun-Times alive,” said a source close to both companies. “You have to give him credit for that.”
In addition to the Chicago Tribune, Tribune Publishing owns 10 other daily newspapers (including the Los Angeles Times and Baltimore Sun) and more than 60 digital properties.
(This blog is published independently under a licensing agreement with Chicago Tribune Media Group.)
Here is the text of the memo Jack Griffin, CEO of Tribune Publishing, sent to employees:
Tribune Publishing today announced the Company has completed a $44.4 million private placement transaction with Merrick Media, LLC. This investment supports our ongoing strategic plan and provides the Company with additional capital to accelerate growth through additional strategic acquisitions and digital initiatives.
As an element of this investment, Michael Ferro, the Chairman and CEO of Merrick Media, joins Tribune Publishing’s Board of Directors as Non-Executive Chairman. Eddy Hartenstein, who served as Non-Executive Chairman since Tribune Publishing’s spin-off from Tribune Media in 2014, remains on the Board of Directors.
Michael is an excellent addition to our Board. An innovative technology and media entrepreneur, Michael has a successful track record developing companies in the midst of transformation.
Michael previously served as Director and Chairman of Merge Healthcare and as Chairman, Chief Executive Officer and founder of Click Commerce, which pioneered the market for Internet portals. Most recently, Michael served as Chairman of Wrapports, LLC, whose investments include the Chicago Sun-Times, Chicago Reader and several high-growth digital businesses. Mr. Ferro will retain his economic interest in Wrapports, LLC but has relinquished all operating involvement with the Chicago Sun-Times.
Michael is a strong believer in journalism, in the importance of independent news and editorial voices and the value that is derived from the content our talented journalists create.
With this substantial investment, and with the unrivaled reach of our premium brands, Michael and I both believe that we have a tremendous opportunity ahead and we are confident that the future of Tribune Publishing Company is strong.
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