Trib: Sun-Times close to being insolvent, cash reserves under $20M

The race to the bottom continues in Chicago, which finds itself in a race with Philly to see which major American metropolis is the first with no daily newspaper.<bkicjqyite>Chicago's Sun-Times Media Group Inc. burned through another $3.8 million in cash in July, draining its dwindling reserves and turning up the heat on management's attempts to sell the company out of bankruptcy court.

The struggling publisher, which owns the Chicago Sun-Times and a string of suburban papers, has just $19.3 million in cash left, court documents show.

That leaves it close to becoming "administratively insolvent," where there's not enough cash to cover severance and other shutdown costs, estimated restructuring expert Bill Brandt. His calculation includes millions in accrued professional fees from the bankruptcy case that have yet to be accounted for publicly.</blockquote>http://www.chicagotribune.com/business/chi-sat-sun-times-0822aug22,0,2510013.story

 

Looks like the Sun-Times isn't finished yet.

http://www.suntimes.com/business/1758407,sun-times-media-bid-tyree-investors.article

 

The Trib offers some details on how the Sun-Times company plans to stop the bleeding.

http://www.chicagotribune.com/business/chi-wed-sun-times-tyree-0909-sep09,0,6262939.story

 

Salary cuts for non-union folks effective the end of the month. From the CEO's memo, as quoted on chicagoreader.com:

"Accordingly, we are announcing today a base pay reduction for all non-union employees who make more than $25,000 in annual base pay. The only exception will be the advertising sales staff below the vice president level, because they have already had their total compensation decline significantly due to the downturn in advertising revenues. While this is a difficult, unexpected and tough measure for the Company to implement, it is necessary along with the financial resources committed by the new ownership group to ensure a prosperous future for the Company’s newspapers and Web sites and employees.
"The pay reduction program works like this: the first $25,000 of any employee’s base pay will not be reduced; base pay between $25,000 and $100,000 will be reduced by 8 percent; and base pay over $100,000 will be reduced by 11 percent.
"Additionally, we have sent letters to our bargaining unit leaders today seeking their formal approval of a set of economic and work rule-related changes required by the Buyer. These are a required condition to be met before we can close a sale. The Buyer has required that agreement to these terms be achieved in writing no later than Tuesday, Sept. 29, 2009."

 

Sun-Times guild members meeting now to discuss accepting or rejecting Tyree's conditions to buy the company. The CEO says if union rejects the deal, the Sun-Times will cease to exist because no other buyers are in line and money is almost gone.

http://www.chicagoreader.com/TheBlog/archives/2009/09/15/a-warning-to-the-troops-from-the-ceo-of-the-sun-times-media-group

 

What's going to happen here? I heard they voted it down. The threat said voting it down meant the newspapers would close.
Man ... somebody ought to buy some of those smaller papers. That Southtown Star formerly the Daily Southtown would be a moneymaker if it hadn't been gutted. It can make money again.

 

If the buyer pulls his offer and the Sun-Times, burning cash at its current rate, doesn't close down, then the CEO who put out that saber-rattling memo will have lost major credibilty. His bluff will have been called.

Not sure if that would strengthen the hand of the worker bees -- does anything strengthen the worker bees these days? -- but it would reveal current management to be even slimier and bigger bullies than they're already presumed to be.

OK, OK, this time we're really going to shut down if you don't cave on your contract...

Right.

 

"Trib: Sun-Times close to being insolvent, cash reserves under $20M"
--
Pot, Kettle.

 

This is very interesting. I saw the buyer did an interview with the Tribune (which is crazy in itself; the Sun Times isn't covering this as well as the rival) in which he said it looks as if he has lost. That means they all lose? Also the Trib reported that the Sun Times will go to a universal desk, blah blah and get rid of jobs. The Sun Times is dead either way. Total reorganization. Sounds like the same crappy Web model we've heard about all over.
What ever happened to that Denver online paper with employees from the RM News?

 

If the goal was to pit union members against non-union members at the Sun-Times company -- which I'm absolutely certain was the plan -- Tyree and the current upper management tools have succeeded. There is a lot of hatred being heaped on the guild right now from within the company.