Posted by chicagomedia.org on November 19, 2008 at 09:28:55:
Sun-Times pinching pennies, slicing board
The Sun-Times Media Group has moved to lighten its load?in the board room and on its ledgers?in the face of pressure from top shareholders agitating for change as their investments dwindled to pennies per share.
The parent of the Chicago Sun-Times and dozens of other Chicago-area publications announced Tuesday that Chairman Raymond Seitz and board members Gordon Paris and Graham Savage plan to resign by the end of the year.
Sun-Times Media also plans to de-register itself as a Class A stock in early 2009, a maneuver Chief Executive and Chicago Sun-Times Publisher Cyrus Freidheim Jr. said this summer would save about $10 million annually in lawyering, accounting and paperwork.
Every penny counts, particularly when shares closed Tuesday at 8 cents apiece, putting the company's market value at less than $7 million. The company this month announced a $168.8 million loss in the third quarter.
Sun-Times Media additionally said it is awaiting final Securities and Exchange Commission and court approval on an agreement in principle to resolve matters concerning questionable practices that occurred when since-convicted Conrad Black controlled the company. That will enable the company to disband the special committee formed to investigate and monitor itself.
Alarmed by the way the company has been burning through cash, top shareholders Davidson Kempner Capital Management and K Capital, according to SEC filings, have pushed in recent weeks for Sun-Times Media to reduce the size of its board from seven directors to five, retaining only Robert Poile of Polar Securities, another big shareholder.
The slate of replacements for the board proposed by Davidson Kempner is heavy on backgrounds in turnarounds and restructuring, as well as a former president and general manager of the Dallas Morning News. Davidson Kempner said it wants the new board to dump Freidheim as CEO.
Sun-Times Media said its nominating and governance committee is evaluating a general restructuring of its board to be completed by Jan. 1 and is evaluating candidates, including those proposed by Davidson Kempner.
For all the behind-the-scenes upheaval and uncertainty, there is enthusiasm for the product the company is actually putting out.
Oprah Winfrey has been praising the Sun-Times as one of her favorite things on her internationally syndicated TV talk show. "You're rocking, Sun-Times," Winfrey said on Friday's show, while a week earlier she referred to it as "the best paper of all the papers."
A spokeswoman for Winfrey said the host was unavailable to elaborate on those remarks.
But clearly it's one thing to invest in a newsstand copy or subscription, however, and another to invest in the company, as its shareholders and management have become all too aware of.
(Phil Rosenthal, Chicago Tribune)