Sun-Times Media Group to cut operating costs by $50 million
By Erina Lin, Monday 17 December 2007 at 23:46 :: Management :: #990 :: rss
The Sun-Times Media Group (STMG) announced Friday its board of directors had approved management's plan to reduce operating costs by US $50 million in the first half of 2008. The announcement came just three days after K Capital Partners LLC, the group's second-largest shareholder, demanded even further cost-cutting measures be taken.
STMG partly gave in to demands that its top executives and board directors take their 2008 compensation entirely in cash instead of stock.
The group said its top executives, including Chairman and CEO Cyrus F. Freidheim Jr., "have agreed to take a portion of their 2008 compensation in shares of Sun-Times Media Group Class A common stock."
STMG also said the board "elected to receive 100 percent of their 2008 annual retainer fees in stock," Editor & Publisher reported.
"Management needs to set an example and demonstrate the confidence it has in the future of Sun-Times Media Group," Freidheim said in a statement.
The $50 million reduction includes $10 million in savings to be realised by two actions: Contracting circulation operations to rival Chicago Tribune, and combining the suburban Daily Southtown and twice-weekly Star newspapers. These actions have been undertaken by the publisher of the Chicago Sun-Times and dozens of other Chicago-area papers.
STMG will provide additional details on where savings come from as the measures are implemented.
"The future of the company rests on management's ability to size anticipated costs with anticipated revenues to achieve profitable operations," Freidheim stated.
Freidheim also stated he expects the group's businesses to "survive and prosper" through "appropriate investments to drive our key strategic initiatives, including the expansion of our digital services platforms," E&P reported.
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