Sun-Times Media Group Inc. has become the second major Chicago newspaper publisher to seek bankruptcy protection as a plunge in advertising revenue drains available cash.
It follows Chicago Tribune owner Tribune Co. and three other newspaper companies that have filed for bankruptcy since December. Publishers are halting print editions, firing staff and selling assets to cope with plummeting revenue as more readers get their news from the Web, where ad sales are less lucrative. U.S. newspapers lost 17 percent of their ad revenue last year, according to the Newspaper Association of America.
“With the decline in classified and auto and retail advertising, it’s probable we’ll see more bankruptcies this year,” said Ken Doctor, an analyst with Outsell Inc. in Burlingame, Calif. “Advertisers, particularly auto, retail and classified, have pulled back as the economy gets worse and worse.”
Sun-Times Media, owner of the namesake publication, and its principal operating subsidiary, the Sun-Times News Group, will continue to run their newspapers and online sites while they focus on improving cost structure and stabilizing operations, the publisher said in a statement Tuesday.
Conrad Black, the former Hollinger Inc. chairman who controlled the company until he was forced to step down in 2003, is listed as an unsecured creditor with an “indemnification claim and monies to exercise stock options.” Sun-Times Media said it expects the bankruptcy process to be completed by the end of the year.
