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James Tyree wouldn't name the other investors in the group he's put together to buy the Sun-Times Media Group — no surprise there, the deal isn't done yet, and he says they'll all be known once it is — so I asked him what they all have in common.
"We're all Chicagoans," he said.
That means, I hope, they regard the Sun-Times as he does, which is as a newspaper of "high integrity that has served Chicago long and well as a source of local news and can be an important part of our fabric for a long time to come."
But if they uniformly think that today, will they all think it in a year, if the media group's flagship paper continues to drag down the company Tyree's team is in the process of buying? "It's a pretty good opportunity, but it's certainly filled with risk," said Tyree. Everyone reads risk differently and everyone has a different tolerance for it. In a year, what will protect the Sun-Times against what could have become by then a vocal minority (or more) of investors who have begun to argue it's time to cut their losses? Will sentiment? Or will it have to be profit?
As Mike Colias observes in a skeptical Crain's Chicago Business piece that appeared just before Tyree's tentative deal with the media group was announced, the money-losing Sun-Times is the number two paper in town in an era "when many observers question whether even one daily paper can survive in most cities." And the Tribune, whose long-range plans going back some 20 years presumed the Sun-Times would go out of business, seems to have decided it has too many troubles of its own to put up with the competition any longer: Colias notes that it's become "much more aggressive toward its cross-town rival thorugh the RedEye commuter paper and tabloid versions of the Trib."
The days of 20 percent profit margins are over in the newspaper business, but I asked Tyree what sort of margin he'll settle for. My next question would have been: . . . and your partners? But he cut me off. "Let me say, the first challenge is to turn a profit. We think we know how to do it." He reminded me that he'd spent the past 29 years "in the business of buying and selling and financing hundreds of businesses."
Tyree's the CEO of Mesirow Financial.
My own newspaper, the Reader, and its parent Creative Loafing Inc. just left bankruptcy under new ownership — an investment fund. These owners put together a team of experienced newspaper people who have visited the papers delivering the welcome message that it's necessary to invest money to make money, and therefore we will probably have a little more money to work with here in the near future. Tyree told the Sun-Times the investors intend to pump tens of millions of dollars into the company." But the first messages received by the employees of the Sun-Times Media Group were that pay cuts will continue for the unionized workers and that they'll be imposed on everyone else.
"Yes, we're going to be investing money. Our biggest thing will be a substantial investment in technology," Tyree told me. "But I certainly don't think anything's going to get easier. The key will be to innovate, to change and change rapidly." How? Nobody in the business seems to have an answer to that one. Tyree said he has no idea what the media world will look like in five years, except that it won't look like it is today. He described himself as a "nuts-and-bolts guy," not a visionary, and he said he's not interested in bringing in visionaries, at least not the incantatory types who found favor under Sam Zell at the Tribune. "I believe in the people at the Sun-Times," he said, meaning, I gathered, the entire company. "There's great people there, and other people will be involved too."
What other people? He didn't say.
Here's an interesting take on the deal from blogging newspaper consultant Alan Mutter, a former Sun-Times city editor who thinks those tens of millions of dollars won't be enough to turn around that "heavily overmatched" paper.