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'Chicago Sun-Times' Parent Reports Widening Q3 Loss on $165.8 Million Charge

Magazine article Editor & Publisher

'Chicago Sun-Times' Parent Reports Widening Q3 Loss on $165.8 Million Charge

Article excerpt

Sun-Times Media Group (STMG) lost $194 million, or $2.41 per share in the third quarter, mostly on a non-cash write-down of accumulated tax credits, the parent of the Chicago Sun-Times said in a Securities and Exchange (SEC) filing Friday.

STMG took a charge of $165.8 million on the quarter. The tax credits, accumulated from previous losses, can be used, but accounting rules mandate that their value should be lowered if there is "significant evidence" the company is not going to be profitable enough in the future to take advantage of the credits.

In the same period a year ago, STMG lost $34 million, or 43 per share.

STMG's operating loss widened in the third quarter to $23.2 million from $22.4 million for the third quarter of 2006.

STMG, publisher of about 100 papers in the greater Chicago market, said its ad revenue turned down 6%, its circulation revenue fell 7% -- and it continues to spend heavily on litigation costs. The company spent $7 million in third period, mostly related to picking up the defense for ousted Chairman Conrad Black and three other former top executives who were convicted in federal court for fraud.

Separately, STMG said it is laying off 20 full-time and 11 part-time Daily Southtown newsroom employees as a result of the merger of the newspaper with the twice-weekly Start newspapers. …

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