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WBEZ, Chicago Sun-Times agree to work toward merger – Crain’s Chicago Business

Industry observers are optimistic about the Chicago Sun-Times and city public radio station WBEZ’s plan to join forces, creating possibly the first scenario in the nation in which a public radio station owns a newspaper.

Both organizations signed a nonbinding letter of intent Wednesday evening to figure out a partnership. 

“Lord knows we need some sort of new approaches and experiments” in journalism, said Rick Edmonds, media business analyst for the Poynter Institute, a nonprofit journalism school and research organization that owns the Tampa Bay Times. “This is an interesting new thing.”

There are clearer paths for newspapers to become nonprofits now, and precedent has been set for nonprofits owning newspapers. Besides the Tampa Bay Times model with Poynter, the Philadelphia Inquirer is owned by a nonprofit called the Lenfest Institute.

Lenfest advised on the proposed Sun-Times/WBEZ merger, said Lenfest CEO Jim Friedlich. The combination is a win for both organizations, but also for Chicagoans, who will benefit from stronger local journalism, he said.

“Each news organization brings unique strengths and audiences to the combined entity—the digital and real-time news capability of the Sun-Times marries wonderfully with the broadcast reach and audio expertise of WBEZ and Chicago Public Media,” he said in an email. “The merger will serve Chicago with the public-service journalism it both deserves and needs.”

Indeed, the heads of both organizations said today that the goal is to expand their reach. Together, they can reach 2 million readers per week across broadcast, print and digital, said Matt Moog, who was interim CEO of WBEZ for a year until the board made his position permanent Wednesday. Since news of the deal broke yesterday, Moog has been telling his employees this isn’t about job cutting, it’s about expanding and innovating in journalism. He emphasized his point today.

“There are no plans for staff reductions of any kind,” he said. “The fundamental premise of this entire combination is that this is about growth, this is about investing.”

Moog said WBEZ employs about 155 people and has 30 job openings, about half of which are in the newsroom. Sun-Times CEO Nykia Wright declined to comment on how many employees the paper has, but said key positions in its newsroom are open as well.

Both leaders declined to comment on terms of the deal, and said details around the combination are still being sorted out. That includes what products will be delivered to readers and listeners. Wright said there are no changes planned to the Sun-Times print publication, but the organization does want to bolster its digital subscriptions.

They are also still working out the future structure of the newsrooms. There are beat overlaps, but that doesn’t mean cuts, Wright said. Everyone is so used to hearing about consolidation in the industry, that people think only one person can cover a beat, she said.

“This is the third largest city in the U.S.,” she said. “There’s a lot out there that is not being covered.”

Poynter’s Edmonds agrees. He has written for several years about how local NPR stations, already robust news organizations, were further stepping up to fill news coverage voids left as papers have shrunk in recent years.

One benefit to a paper becoming nonprofit is a new revenue stream: funding from philanthropic organizations. The news release said that in addition to Sun-Times investor Michael Sacks, the Pritzker Traubert Foundation and the John D. & Catherine T. MacArthur Foundation “have stepped forward with early and enthusiastic support.” Moog said that support is helping to finance the Sun-Times acquisition.

Chicago Public Media, which operates WBEZ and sister station Vocalo, is a longtime beneficiary of both foundations.

MacArthur Foundation President John Palfrey said his organization is eager to be an early supporter of the collaboration, which he hopes will strengthen local journalism and help newsrooms diversify their staff.

“We are pleased to see emerging models devoted to addressing the crisis in the news media business and the significant challenges facing our democracy today,” he said in a statement.

Supporting journalism and media is one of MacArthur’s key areas of funding, and it specifically looks to prop up reporting from nonprofit organizations, one of the biggest examples of which is ProPublica. It has awarded $116 million in grants and investment through these efforts between 2015 and 2020 and says it seeks to strengthen American democracy by bolstering independent media.

Chicago Public Media has received nearly $5.6 million from MacArthur through various grant programs since 1982, according to its website. The money has helped underwrite general operations, acquisitions, new projects and hallmark programs like “This American Life.”

WBEZ’s Race, Class and Communities Desk, which the station added in 2018, also received financial support from the Pritzker-Traubert Foundation. Foundation co-founder Bryan Traubert, a retired ophthalmologist and husband of Penny Pritzker, is a director on WBEZ’s board.

Some industry observers have pointed out even before the merger that Chicago’s journalism scene is at an inflection point. Hedge fund Alden Global Capital bought the Chicago Tribune earlier this summer, and dozens of journalists left the paper in buyouts that followed the deal. A steady drumbeat of leadership and other employees have continued to leave since. At the same time, more publications around the area are making the switch to become nonprofits. And all the while, WBEZ has been hiring.

A final agreement has not yet been reached, and leaders expect the deal to close by the end of the year. 

Of course, nonprofit ownership does not provide a shield against the newspaper industry’s headwinds, Edmonds said. Circulation costs continue to rise. And in a two-paper town like Chicago—a dying breed—advertising dollars are sometimes split.

“Those (challenges) will remain for the Sun-Times,” he said.

Still, a partnership with WBEZ parent Chicago Public Media will help secure the future of the Sun-Times, Jorge Ramirez, chairman of the Sun-Times board, said in the release. 

“The primary goal of every Sun-Times investor has been to strengthen and secure the future of the paper,” he said. “The right transaction with Chicago Public Media can do that by creating a strong and sustainable Sun-Times for the journalists and for Chicago.”

Crain’s Elyssa Cherney contributed.

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