Here’s a fun little guessing game, inspired by a story we read yesterday about a Chicago newspaper company’s business troubles.
In an article titled “Circulation fraud still haunting S-T,” a staff reporter in Chi-town wrote that “Circulation fraud discovered in 2004 continues to bedevil Sun-Times Media Group Inc., contributing to a drop in advertising revenue, the company’s chief executive told analysts Wednesday.”
“The company that owns the Chicago Sun-Times and about 100 local newspapers showed an operating loss of $13.7 million in the second quarter of 2006 compared with a $4.2 million loss a year ago,” the reporter added. “But a $29.9 million tax benefit enabled the Group to report a net profit of $20.6 million, or 24 cents per share, compared with a loss of $15.5 million, or 17 cents a share, a year ago.”
The story went on to give chief exec Gordon Paris’s explanation for why ad dollars have recently fallen 10 percent — a mix of “industry-wide and company-specific problems,” including, as he cited, “circulation misstatements the company first reported in 2004, which depressed ad sales.”
The story ended with Paris defending the company’s strategy, and by noting that Sun-Times Media Group’s stock fell 8 cents Wednesday.
So where was this story published? Not in the Chicago Tribune, the archrival of the Sun-Times, but in the Sun-Times itself.
Yes, in an admirable display of candor, the tabloid gave a clear-eyed accounting of its parent company’s current financial state — one that cut to the chase faster than the Wednesday AP story available on the Tribune Web site.
Meantime, the Tribune did not have anything on the Sun-Times’ financials yesterday or today — although it has run two even-handed pieces on the ongoing legal travails of Conrad Black, “the ousted media tycoon whose holdings once included the Chicago Sun-Times.”
As the Sun-Times’ own reporting indicates, its parent company faces troubling problems. Fortunately, facing up to the facts does not appear to be one of them.