Published on Wednesday, 23 May 2012 16:15
The parent company of the Chicago Sun-Times, Wrapports, LLC, today announced
its purchase of the alternative weekly newspaper, the Chicago Reader. Wrapports also acquires the Chicago Reader's web-properties, ChicagoReader.com
. Terms of the transaction, which closed late yesterday, have not been disclosed, although the purchase price is said to be just under $3 million.
News of the impending sale was first reported by Crain's Chicago Business' Lynne Marek, back on May 9th
. This was preceded by a report from Marek two months earlier
that the Chicago Reader is being shopped around by an agency hired by its owner. Among the organizations that was reportedly approached at that time was Wrapports, LLC.
In August 2009, the bankruptcy court allowed Creative Loafing's chief creditor, Atalaya Capital Management to take over the company and its properties, but the New York-based private equity firm had no desire to be a long-term publishing company. Since taking over, Atalaya has been slowly selling off properties and cutting expenses. Now that Wrappoorts, LLC has purchased the Chicago Reader, Atalay's Creative Loafing only has alternative weekly newspapers left in Atlanta and Washington, DC, down from the five weeklies it was publishing before Atalaya first took over.
Brad Bulkley, President of the Dallas-based Bulkley Capital, L.P., represented Atalaya and Creative Loafing for this transaction. In today's announcement, Bulkley said: "We are pleased to have been able to place this highly-regarded Chicago institution into such capable hands. The Reader has, for many years, been one of the most recognized and respected brands within the alternative weekly space. As a Chicago native, it was important to me that we found an owner able to preserve and grow that franchise. Fortunately, Atalaya gave us the flexibility to identify the ideal successor."
Timothy Knight, CEO of Wrapports, LLC, said today: "The Chicago Reader has one of the most distinctive voices in the Chicago news community, and it has cultivated a dynamic and loyal audience. The Reader has demonstrated positive momentum in the last few years, expanding its readership to include new generations of Chicagoans, and the company has strong growth potential."
While it was not mentioned in the official announcement, Chicago Reader Publisher Alison Draper will be stepping down from her position by the end of next month. There has been no replacement named. Chicago Reader Editor Mara Shalhoup will be remaining in her role for the foreseeable future. For now, she will be reporting to Jim Kirk, Sun-Times Media's new Editor in Chief. The Reader reportedly has 47 employees. While most will be retaining their jobs, it is not yet known if some of those jobs will be soon merged with other similar Sun-Times jobs and if the Reader employees will be moved into the Sun-Times building.
For Sun-Times Media, the addition of the Chicago Reader gives the company more coverage to downtown arts, entertainment, and culture, as well as a way to connect with a younger reader. More than that, it gives them a better way to compete against the Chicago Tribune-owned RedEye and steal away some of RedEye's advertising dollars. For the Reader, having the added muscle of the Sun-Times behind them, gives them the abilities and resources to better compete, both in print and digitally, against RedEye and Time Out Chicago. In a twist, Time Out Chicago majority owner Joe Mansueto is one of the many investors in Wrapports, LLC. Mansuetto was supposedly looking at making his own independent offer for the Chicago Reader, with the purpose of merging it into Time Out Chicago and eliminating its chief rival.
The Chicago Reader, founded in 1971, is one of the largest and most successful alternative weeklies in the country. It is Chicago's largest free weekly newspaper, with a cumulative readership of 612,000 in print and online.