Finally coming to grips with the reality that no second bidder was going to surface to buy the newspaper company out of bankruptcy, most unions at the Sun-Times Media Group have agreed to deep wage and benefits cuts demanded by the investment group headed by Chicago businessman James Tyree. The sale for $25 million got approval Thursday from Federal Bankruptcy Judge Christopher Sontchi in Delaware.
Another union is yet to vote today – the one representing newsroom employees of the Post-Tribune in Gary, IN. It is the only one of the five large unions at the company yet to approve the concessions. In all, 14 unions have said OK to the concessions that Tyree said are essential to his plan to keep the Chicago Sun-Times and its related suburban newspapers operating.
It was less than a month ago that the major unions turned thumbs down on the concessions. Since then, hopes faded as potential rival bidders drifted away without bidding. Also, Tyree did make some modest changes to his demands. Workers who are laid off in the near future will get a bit more in severance, employees get 30 days notice before a permanent transfer and the Newspaper Guild, the largest union, retains a right to file grievances. But the biggest concessions remained: 15% pay cuts instituted under Chapter 11 remain in effect for three years; the company pension fund is replaced with a 401(k); and no seniority right when it comes to layoffs.
Tyree’s STMG Holdings has agreed to pay $5 million in cash and assume $20 million in liabilities to buy the Sun-Times Media Group out of bankruptcy. The sale is expected to close by the end of this month.
