Lerner Newspapers - History - Decline and Fall

Decline and Fall

The 49-year-old Louis Lerner died of cancer in 1984. The following year, the Lerner family sold the chain to Pulitzer Publishing, publishers of the St. Louis Post-Dispatch. When it bought the chain of 52 weeklies for $9.1 million, Pulitzer hoped to win readers and advertising dollars from the Chicago Tribune and Chicago Sun-Times in the same way that the Suburban Journal weeklies were weakening the Post-Dispatch. Pulitzer planned to increase Lerner's combined circulation of about 300,000 to compete in the Chicago newspaper market, but the recession of the early 1990s eroded the chain's advertising base, over half of which was help-wanted classified ads, and the chain was unsuccessful in winning automotive and real estate ads away from the dailies.

The sole weekly group in Pulitzer's stable, Lerner was left to founder. Pulitzer closed and merged many of its editions, until only 15 were left. Circulation had plummeted from 300,000 in 1985 to 100,000 by 1992. In 1992, Pulitzer was on the brink of shutting down the Lerner papers but, at the last minute, with final editions set in type, sold the chain's assets to Sunstates Corp. for a reported $4 million.

Sunstates, an investment firm led by Clyde Engle, was in the business of buying moribund companies for tricky financial operations. Under Sunstates, which owned a mixed bag of companies such as an insurance firm, a chocolate factory, a furniture factory and an apple orchard, but had never before run newspapers, the Lerner chain continued to erode while Sunstates managers constrained journalists to keep 9-to-5 hours and ordered senior newspaper staff to cook doughnuts and pick apples after orchard workers walked out.

In 2000, in a surreptitious arrangement that came to be known as the "Lerner Exchange," Sunstates sold the chain to a company fronted by Canadian press baron Conrad Black, who resold it to Hollinger International. This and other illegal maneuvers by Black and sidekick David Radler, Sun-Times publisher, ultimately led to their conviction on fraud charges when they were found to have looted millions from the company.

Amid Hollinger reorganization (ultimately to the Sun-Times Media Group) in the wake of the scandal, the company merged Lerner Newspapers into its longtime suburban rival, Pioneer Press, in 2005. Pioneer management quickly dropped the now-embarrassing Lerner name and killed all Lerner's suburban editions. Pioneer continued to print a handful of city of Chicago newspapers with the old nameplates — the Booster, News-Star, Skyline and Times — converting them from broadsheet to tabloid, until January 2008, when the company announced it was pulling out of urban publishing entirely. At the last moment, the Booster, News-Star and Skyline titles were sold to the Wednesday Journal, another Chicago-area weekly group.

In March 2009, the Wednesday Journal announced that it was dropping the News-Star and the Booster, along with the Bucktown/Wicker Park edition of the Chicago Journal (into which a Booster edition had been merged). Although reduced to operating from his home, Ron Roenigk, the publisher of Inside Publications, said he would be buying the two former Lerner nameplates, largely to get their legal advertising.