In an unprecedented maneuver to try to secure the “future” of one of Chicago’s two daily newspapers, the board of directors of Chicago Public Media voted on Wednesday to acquire it Chicago Sun-Times.
In a joint statement from both news organizations released on Wednesday evening, the board also announced that it would appoint Matt Moog as the new CEO of Chicago Public Media after serving as an interim member for nearly a year and completing a two-year search for a new top -Manager for the public media company.
The board approved a “non-binding letter of intent” to move the deal forward, which – under a definitive agreement – the Chicago Sun-Times a subsidiary of Chicago Public Media, the joint statement said.
The two brands would “create one of the largest local not-for-profit news organizations in the country and be a national model for the future of local journalism”. But the statement says that the two news brands WBEZ and Solar times, “Would continue to serve their respective audiences.”
Moog said in an interview that the board’s vote will allow the organization to move forward on the deal he hopes will be finalized by both news organizations by the end of the year. Moog said he didn’t think the plan needed external or regulatory approval.
The deal would give Chicago Public Media potentially greater reach across all platforms, Moog estimated.
“This is an investment and growth opportunity. We want to build up our staff, we want to build the audience, we want to invest in journalism, ”Moog told WBEZ in an interview. “All of this is focused on ensuring we serve an expanded and engaged, diverse audience that is representative of the community we serve.”
Solar times CEO Nykia Wright, who remains in her position under the proposed deal, said she believes the acquisition will set an example for local news organizations across the country.
“If we get this right, not only will it have a significant impact on the Chicago community, but I really believe it will have an impact across the country,” she said. “We’re not talking about reduction here. We’re talking about expansion and that’s one of the most exciting things journalism has produced in at least a decade. “
Wright said she wasn’t expecting any layoffs Solar times because of this deal. When asked the same question, Moog said job security is a top priority for employees at both companies.
Funding would come in part from great philanthropy
The board of directors of Chicago Public Media approved the deal in a closed meeting on Wednesday evening.
The two companies would share content from both newsrooms on their platforms, including broadcast, print, podcasts and public events, the joint statement said.
The statement also indicated that funding would come through public fundraising appeals to fund the nonprofit, but could also include funding from large philanthropic organizations.
“In addition to Solar times Investor Michael Sacks, other organizations that have emerged with early and enthusiastic support are the John D. and Catherine T. MacArthur Foundation and the Pritzker Traubert Foundation, ”the statement said.
Moog wouldn’t reveal how much financial support the foundations are providing under the deal, just saying that “the foundations mentioned have really grown significantly”.
“It is a national model for funding the future of local journalism that we talk to other foundations and philanthropic donors to ensure that we not only have the resources to not only survive but also invest and grow” , he said.
News of the possible deal was first reported by media columnist Robert Feder.
Moog and Wright then both Confirmed emailed the potential of the deal to their employees, but both executives said the deal was far from over and wrote that they both believe protecting editorial offices is important.
Moog, a tech entrepreneur who served on the organization’s board of directors, became interim CEO of Chicago Public Media in October 2020. He took over the interim function after a permanent election for the position has withdrawn its acceptance amid questions about how she dealt with allegations of misconduct at her former employer.
But the search for a new CEO has stalled amid the pandemic. Appointing Moog for the position apparently ends this search.
As older media struggle, there is potential for a new model
The model that the two organizations are aiming for – a long-established newspaper and public radio station operating under one not-for-profit umbrella – would be the next iteration of a nationwide slow movement of Newspapers maneuvering towards the public good.
The Philadelphia Inquirer is now a not-for-profit corporation owned by the nonprofit Lenfest Institute for Journalism. This status means that the company is prioritizing its mission of providing a public benefit while making a profit. The Lenfest Institute can support the paper financially in addition to other organizations selected by it.
On Wednesday evening, Lenfest Institute CEO Jim Friedlich said his organization was advising Moog and Chicago Public Media’s boards of directors on the proposed deal. He said he was able to use the institute’s charitable status in Philadelphia to appeal to foundations to support more investigative news, more diversity, and digital products.
“(Chicago’s) news capacity has been destroyed over the years by foreign hedge fund owners, the secular decline of the print media, and a failure to invest in the digital transformation of local news products,” Friedlich wrote. “Today’s announcement is wonderful news and a role model for other public media outlets and local newspapers to emulate.”
the Solar times has a long history of financial struggles and leadership changes as it has changed hands several times. The company requested Bankruptcy protection in 2009, as she and other newspapers struggled to find a financial base in the face of declining advertising and printing revenues. Later that year, the paper was bailed out from bankruptcy by an investment group led by James Tyree for about $ 25 million, of which $ 5 million was in cash and the remainder to take on the company’s debt.
Just a few years later, in 2011, Tyree died and the newspaper was handed over again, this time to a new company named Wrapports, LLC, under the direction of the entrepreneur Michael Ferro.
Potential merger agreements with other major media companies have come and gone over the years. In May 2017, when the Solar times allegedly lost $ 4.5 million a year to Ferro, who by then had gotten rid of the Solar times and was chairman of Tronc – the owner of the Chicago grandstand back then – led to a fresh impetus for the acquisition of the newspaper.
But regulatory issues intervened when the Justice Department’s antitrust division raised issues about merging two major newspapers in the same city. In July 2017, the Solar times instead it was sold to a group of investors, including a former Chicago city councilor, allegedly for $ 1.
While they do not provide details on the current financial position of the WBEZ Solar times, Wright said the newspaper’s losses had decreased and it was in a better financial position than before.
Wright told WBEZ that if the board of directors of Chicago Public Media rejects the final takeover, the Solar times would continue as an independent entity, “with the backstop funding we are used to receiving”.
“It’s not a fire sale. It’s a thoughtful, strategic opportunity to support and grow journalism in Chicago, ”said Wright.
Tony Arnold covers state policy for WBEZ. follow @tonyjarnold.