Wednesday, May 9, 2012

Crain's says Reader going to Sun-Times

Posted By on 05.09.12 at 06:18 PM

Michael Ferro
  • Michael Ferro
The Reader probably will be sold soon to the owners of the Sun-Times for about $3 million, according to a story published Wednesday afternoon by Crain's Chicago Business.

Reporter Lynne Marek quoted investment banker Brad Bulkley as saying that a "deal is close, but no deal is final until it actually closes."

Bulkley was hired by Atalaya Capital Management of Atlanta to sell the Reader and four other weeklies that Atalaya wound up with in 2009 after parent company Creative Loafing Inc. declared bankruptcy. Atalaya had been the primary lender when CLI borrowed $30 million to buy the Reader and its sister paper, Washington City Paper, from the Reader's founding owners in 2007.

Bulkley is out of the country, and I couldn't reach him Wednesday afternoon.

On Atalaya's watch, and under publisher Alison Draper, the Reader has revamped its design, greatly expanded its website, and turned a small profit. That doesn't mean it met the expectations of a hedge fund that never pretended to understand journalism, much less to have figured out how it should reinvent itself. Venture capitalist Michael Ferro, chairman of Wrapports LLC, which owns the Sun-Times Media constellation of daily and weekly papers and would be the new owner of the Reader if the deal goes through, is very different. For better or worse, Ferro regards himself as visionary: Marek quoted him as declaring in January, at an event held by the U.S. Conference of Mayors, "I'm very excited to meet all these different mayors in other cities because my plan is to acquire their publications in a lot of their cities today and keep newspapers alive in America.”

A more recent Marek article for Crain's even hinted that Ferro and his Wrapports allies might be interested in taking over the Chicago Tribune, currently in the limbo of the parent Tribune Company's bankruptcy. The money's there: among the Wrapports investors is billionaire Joe Mansueto, who controls Time Out Chicago, the Reader's principal competition.

Puritans would blink at Mansueto owning most of one magazine and a piece of its chief rival, but everyone's too busy these days dreaming dreams and trying to survive to worry much about appearances.

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