Posted by chicagomedia.org on February 05, 2009 at 15:50:56:
That's all he wrote
CEO of Sun-Times parent, Cyrus Freidheim, to resign
February 5, 2009
BY DAVID ROEDER | Chicago Sun-Times
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Cyrus Freidheim said Wednesday he will resign as president and chief executive of the company that includes the Chicago Sun-Times.
Now that power has shifted on the board of Sun-Times Media Group Inc., Freidheim said he is voluntarily stepping aside. Freidheim, 73, hazarded no guesses as to a successor but said he hopes the board will consider internal candidates.
"I certainly wished the market was more reasonable because I think we've got a great team. We executed, I think, superbly on a lot of fronts," he said. Freidheim also said he is confident the papers, which include suburban dailies and weeklies with related Web sites, will survive, but possibly in the hands of a buyer.
Freidheim, a former vice chairman at management consultant Booz Allen Hamilton, took the media company's reins in late 2006 as it was cleaning up the corrupt leadership of Conrad Black, now in prison for stealing at least $6.1 million from shareholders. Freidheim's plans to refocus Sun-Times on growth were overrun by a recession that has caused major sources of media revenue to fall at annual rates of 20 percent.
Under his watch, the company cut staff and outsourced departments. But Freidheim said further cuts worth about $75 million annualized still are needed to bring the Sun-Times Media Group to break-even.
In addition, Sun-Times is negotiating with the IRS a tax liability from the Black years that could hit $600 million. And last week, a Canadian arbitrator ordered the company to pay $42 million in a legal dispute dating from Black's sale of newspapers to CanWest Global Communications Corp.
Freidheim would not discuss sale scenarios except to say there have been no discussions with talk-show host Oprah Winfrey, who has gushed over the Sun-Times' coverage of President Obama on her show.
"If we did go into bankruptcy, that would not mean the end of the company," Freidheim said. Tribune Co., owner of the Chicago Tribune, is operating under Chapter 11.
Freidheim's departure would take effect by Feb. 28 to allow for a transition. A new board member, Jeremy Halbreich, former general manager of the Dallas Morning News, has been spending time at the company reviewing operations.
Halbreich is part of a slate backed by dissident shareholders unhappy with ongoing losses. Shares of Sun-Times Media Group, a stock traded on the Pink Sheets, were worth $1.72 each a year ago but last traded for 7½ cents.
A 6 percent shareholder, Davidson Kempner Capital Management LLC organized the dissident group that last month got the shareholder votes to remove Freidheim and all but one of the current board members.
Freidheim said the new board must pick its own leadership. The process will start Tuesday when the new directors hold their first meeting, where Freidheim said they will get a "thorough indoctrination" on the company's challenges.
"They will come out of that meeting with a better view, but I don't know that they'll come out with any specific plans," he said, adding, "They are in the fact-finding mode right now."
Sun-Times Media Group's most recent financial report, covering the end of last year's third quarter, said it had $99 million in cash. But executives said it lately has been losing about $1.3 million a week. The company said it holds about $18 million in escrow for the CanWest case.
In a statement, holdover board member Robert Poile said the new members regret Freidheim's departure and thanked him for his dedication during "two very difficult years." As for what's ahead, Poile said, "The ride will be rough, but it's worth the effort."