Sun-Times Media to cut pay for nonunion workers as investor group bids for company

Sun-Times Media to cut pay for nonunion workers

NEW YORK — The Sun-Times Media Group told employees Wednesday that nonunion workers will take a steep pay cut as the publisher faces a likely takeover by a group of private investors when it comes out of bankruptcy protection.

The company, publisher of the Chicago Sun-Times and 58 suburban Chicago newspapers and Web sites, has been operating in Chapter 11 protection since March.

In a memo to staff Wednesday, interim CEO Jeremy Halbreich said the company is cutting pay for nonunion workers by 8 percent, indefinitely, if they make between $25,000 and $100,000. Those making over $100,000 will have their pay cut by 11 percent. The advertising sales staff is exempt, Halbreich said, because their pay has already fallen “significantly.”

The media company said Tuesday that an investor group named STMG Holdings LLC, led by Chicago banker James Tyree, has agreed to bid $5 million in cash for Sun-Times Media Group’s assets. STMG Holdings also is willing to take on $20 million in debt.

In Wednesday’s memo, Halbreich said the group has made clear it expects the company to “eliminate the cash burn and become self-sustaining and profitable in the future.” He did not say how much money the company would save through the pay cuts.

Sun-Times Media spokeswoman Tammy Chase said the reduction will cover about 1,270 employees out of a total of roughly 1,900.

But union members are likely to feel the cost cutting as well. Chase said Sun-Times Media is forwarding a list of concessions STMG Holdings wants from the company’s 18 unions, without which it will not go through with the deal.

Many newspaper companies have resorted to cutting salaries and imposing unpaid time off. Employees of The New York Times Co.’s flagship newspaper have had their pay reduced by 5 percent through the end of the year. Union members at The Boston Globe, also owned by the Times Co., have taken a nearly 6 percent pay cut. Gannett Co., the biggest U.S. newspaper publisher, imposed unpaid furloughs this year but ended up announcing in July that it still would need to cut 1,400 workers.