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Sun-Times Union Rejects Major Concessions, Buyer Still Interested

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CHICAGO — Unionized workers in the Chicago Sun-Times' newsroom have rejected demands for deep pay cuts and work-rule changes, putting at risk a planned sale of the financially struggling newspaper to an investment group.

STMG Holdings LLC, led by Chicago banker Jim Tyree, wants several concessions from the Sun-Times Media Group Inc.'s 18 unions, without which it will not go through with the deal to bid for the company in a bankruptcy auction.

Members of the Chicago Newspaper Guild were asked to lock in for at least three years the temporary 15 percent wage cuts imposed this spring. Other demands included wiping out seniority rules and reducing severance guarantees. The union rejected those demands 83-22 Tuesday.

Sun-Times Media Chairman Jeremy Halbreich has told workers that a rejection will mean the end of the company.

Tyree has said he won't walk away from the bid until Sept. 29, but said he doesn't want to get into negotiations over the issues.

"I recognize from the bottom of my heart that what's being asked of here goes at a lot of people's core values," Tyree told the Sun-Times. "I'm sorry about that. But in my mind there is no other way. There's no room to negotiate work rules or compensation or pensions because I'm planning on our (investor) group losing money for a good long time."

Tom Thibeault, the union's executive director, said workers understand sacrifices are necessary and want to negotiate.

"This shouldn't be taken as a vote against Tyree, the investors," Thibeault told The Associated Press. "We think he's going to be a pretty good fit. The problem we have is it's pretty much take it or leave it. It guts our contract."

Sun-Times spokeswoman Tammy Chase declined comment Wednesday on what she considered an internal matter, other than to say unions have until Sept. 29 to approve the concessions required by the potential buyer.

The Sun-Times Media Group, which also operates suburban newspapers, already has told employees that nonunion workers will take a steep pay cut as the company tries to meet the investment group's demands to control costs and become profitable. Union members would have to agree to any similar cuts.

On Monday, workers at the company's Post-Tribune of Northwest Indiana rejected the concessions proposal 17-1. Thibeault said union members at the Lake County News-Sun in Waukegan, Ill., voted 12-4 Wednesday to also reject the package.

STMG Holdings has agreed to bid $5 million in cash for the company's assets and take on $20 million in debt. The so-called "stalking horse" bid is contingent on no other higher bidder coming forward, as well as agreement from unions and a judge's approval. No other potential bidder was known.

Sun-Times Media filed for Chapter 11 bankruptcy protection in March, citing $479 million in assets and $801 million in debt.

Besides factors plaguing newspapers nationwide, the company owes as much as $608 million in back taxes and penalties related to the business practices of former owner Conrad Black, who is serving a prison sentence for siphoning millions of dollars from the company.

By reorganizing under bankruptcy protection, the company can wipe out most of the debt as part of its sale.

At least 10 other newspaper publishers have filed for bankruptcy protection over the past year, including Tribune Co., which publishes Sun-Times rival Chicago Tribune.

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