Sun-Times: New CEO Did Banana Business With Terrorists?

Ad drop creates wider loss at Sun-Times Media Group
(http://www.suntimes.com/business/300857,CST-FIN-stmg17.article)

March 17, 2007
BY DAVID ROEDER Business Reporter

The parent company of the Chicago Sun-Times reported a sharply wider loss in 2006 as advertising declined, especially in the fourth quarter.

Sun-Times Media Group Inc. said Friday its 2006 loss totaled $56.7 million, or 66 cents a share, vs. a 2005 deficit of $11.6 million, or 13 cents a share. Revenue declined 9 percent to $418.7 million.

The loss for the fourth quarter totaled $34.6 million, or 43 cents a share, compared with a profit for the fourth quarter of 2005 of $31.6 million, or 35 cents a share. Revenue for the period fell 6 percent to $109.8 million.

Cyrus Freidheim Jr., the company's chief executive, said a new management team has a "mandate to create a revitalized business out of what is a great journalistic product and the No. 1 source of news in the greater Chicago area."

In a filing with the Securities and Exchange Commission, Freidheim addressed the federal investigation of payments banana producer Chiquita Brands International Inc. made to a group the U.S. has identified as Colombian terrorists. He told the company that he hasn't been advised he is a subject of the investigation but that he is a part of a group of current and former Chiquita employees that would be subject of the investigation, should the investigation continue.

Freidheim led Chiquita from 2002 to 2004. Chiquita disclosed the payments, which they said were made to assure employees' safety.

Chiquita on Wednesday agreed to a $25 million fine over payments made from 1997 to 2004. Sun-Times said its board would review the matter.

Friday's financial results were in a regulatory filing that also contained a minor earnings restatement covering 1999 to 2005. The restatement was based on a review of stock-option grants and resulted in an increase of $5.6 million in total options expense covering those years.

Sun-Times Media Group, which also owns the Daily Southtown, Post-Tribune and other large regional papers, said it will present business plans for 2007 and 2008 in a Webcast April 4.

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