Newspapers battle to cut costs

Chicago's two daily newspapers were battling it out in January, but not over a hot story or a valuable advertiser. The object of their desire was a small company that could help them cut costs in the face of plunging ad revenue. Journatic LLC, which hires writers at piecework rates, had a contract to provide real estate information to Sun-Times Media Holdings LLC. But much bigger Tribune Co. was prepared to invest in the firm and pay it to provide wide-ranging suburban coverage. One of Journatic's investors, Tim Knight, had just been installed as CEO of Sun-Times Media. He urged two friends on the board, Tim Landon and Tim O'Neil, to oppose the Tribune deal in favor of expanding the existing partnership. But they couldn't budge Journatic CEO Brian Timpone and the two other board members. Both Mr. Landon and Mr. O'Neil resigned this month when Tribune prevailed. The decision was emphatic evidence of the rush to cut costs in Chicago's struggling newspaper market. Ironically, it also is raising expectations that sooner or later their long-anticipated consolidation may materialize because of the shrinking advertising dollars spent with newspapers.