Another Newspaper Chain Declares Bankruptcy
Sun-Times Media Group, the parent company of the Chicago Sun-Times and 58 smaller suburban newspapers, today became the latest newspaper chain to file for reorganization under Chapter 11 bankruptcy laws.
"Over the past several months, the company has taken several steps to reduce costs and strengthen our organization. However, the significant downturn in the print advertising environment that has affected newspapers across the country has continued to severely impact us," Chairman and interim chief executive Jeremy L. Halbreich of Sun-Times Media Group said in a release. "Unfortunately, this deteriorating economic climate, coupled with a significant, pending IRS tax liability dating back to previous management, has led us to today's difficult action."
The "pending IRS tax liability dating back to previous management" is a reference to former Sun-Times owner Conrad Black, who is one year into a 78-month sentence for swindling shareholders out of millions of dollars to support his luxe life.
(Here's all you need to know about Black: He renounced his Canadian citizenship so he could purchase the British title of lord. Okay, here's another thing you need to know: He's writing letters from jail.)
Sun-Times joins Tribune Co. and Philadelphia Newspapers as the third big-city newspaper company to declare bankruptcy. In addition, the Rocky Mountain News and Seattle Post-Intelligencer have closed or ceased print production.
Big-city papers, with their reliance on classified advertising and a wealth of competitors, are handling the ongoing newspaper downturn and ongoing recession much worse than small-town papers, which generally have a captive advertising audience.
March 31, 2009; 1:33 PM ET
Categories: The Ticker | Tags: bankruptcy, newspaper industry, recession
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