Sun-Times Media — Proxy Contest (December 2008)
18 slides from Sun-Times Media's proxy contest presentation, Dec 19, 2008
Slide 1: Meeting with ISS December 19, 2008
Meeting with ISS December 19, 2008
Slide 2: Cautionary Statement on Forward-Looking Statements
Cautionary Statement on Forward-Looking Statements Certain statements made in this presentation are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements include, without limitation, any statement that may pred
Slide 3: Agenda
Agenda Overview of Sun-Times Media Group Introduction Sun-Times Media Group has made significant progress in 2008 and is implementing an aggressive plan that addresses key dissident shareholder questions. Sun-Times Media Group directors are a highly dedicated, talented group who have led this Compan
Slide 4: Overview of Sun-Times Media Group
Overview of Sun-Times Media Group Sun-Times Media Group is dedicated to being the premier source of local news and information in the Chicago region. The Sun-Times News Group, STMG's operating subsidiary, links the Chicago Sun-Times and 70 suburban Chicago newspaper titles, and 92 Web sites with a C
Slide 5: Introduction
Introduction Sun-Times Media Group (STMG) has a sound, aggressive strategic plan to address key concerns regarding negative cash flow and transformational pressures epidemic throughout the news media industry. Sun-Times Media Group board is committed to restoring the Company to cash- flow neutral an
Slide 6: 2008 Accomplishments
2008 Accomplishments First, a look at what we accomplished in this regard in 2008: We resolved governance issues with Hollinger Inc. STNG increased market share in Chicago DMA four of the last five quarters. Outsourced several non-core functions: Circulation customer service Distribution of all home
Slide 7: Plan for 2009
Plan for 2009 We have a plan in place for 2009 as print advertising (about 70% of our revenue) continues to decline throughout the industry. There are four key components: Focus - Elimination of unprofitable products to focus resources on areas of higher profitability. In 2008, we eliminated 16 titl
Slide 8: Sun-Times Media Group's Duly Elected Board
Sun-Times Media Group's Duly Elected Board Formed Special Committee that investigated and uncovered a staggering amount of wrong- doing by previous management team; recoveries from these activities were $129.6 million as of 9/30/08 Ousted previous management and cooperated with government officials;
Slide 9: Sun-Times Media Group's Duly Elected Board (continued)
Sun-Times Media Group's Duly Elected Board (continued) STMG launched a strategic alternatives process in early 2008 at the request of shareholders - that process is ongoing in what has been a turbulent marketplace. The Board itself recognized that its legacy tasks have been substantially completed a
Slide 10: STMG Board of Directors on 12/19/08
STMG Board of Directors on 12/19/08 Herbert A. Denton President of Providence Capital Inc., which he founded in 1991. Former Managing Director for Jefferies & Co., where he headed mergers and acquisitions and represented a number of leading investors and funds. Active in several governance challenge
Slide 11: STMG Board of Directors on 12/19/08 (continued)
STMG Board of Directors on 12/19/08 (continued) Gordon A. Paris* Served as the Company's President and Chief Executive Officer until November 2006 and as Chairman of the Company's Board of Directors until June 2006. Appointed Interim Chairman in January 2004 and as Interim President and Chief Execut
Slide 12: Davidson Kempner Slate of Proposed Candidates
Davidson Kempner Slate of Proposed Candidates Davidson Kempner's slate of proposed candidates has serious shortcomings that could negatively affect shareholders. Neither DK nor its slate have offered ANY plan or rationale for why they could better serve STMG shareholders. DK has denied the Board the
Slide 13: Dissident's Issues
Dissident's Issues Sun-Times Media Group has an aggressive strategic plan it is currently implementing in an extremely tough industry environment that already addresses three areas of concern raised by DK: Cash burn IRS/legacy issues Repositioning the Company for the future
Slide 14: Cash Burn Rate
Cash Burn Rate DK has raised concern about STMG's cash burn rate. Sun-Times Media Group is tackling cash burn on several key fronts, with the goal of being cash-flow neutral in the next 12-24 months. Earlier in 2008 the STMG Board took steps to reduce costs by $50 million In November 2008 the Board
Slide 15: IRS Tax Issue
IRS Tax Issue At the end of 2006, about the time this management team was assembled, we had about $1.0 billion of accruals to cover contingent tax liabilities in Canada and the U.S. In 2007 we reached an agreement with the Canada Revenue Agency allowing us to reduce our tax contingency accruals by $
Slide 16: IRS Tax Issue (continued)
IRS Tax Issue (continued) We have submitted an appeal to the IRS and expect the process to take 18-36 months. We can also appeal to U.S. Tax Court should the company receive an unfavorable resolution at the end of the appeals process. The STMG Board has assembled a top-notch team of ex-IRS and promi
Slide 17: Repositioning the Company for the Future
Repositioning the Company for the Future STMG's board recognizes the value of the Sun-Times News Group brands in the Chicago market and is undertaking an expansion of these brands STMG is continuing efforts to transform the Company to a fully integrated 24/7 news operation with strong digital capabi
Slide 18: Conclusion and Recommendations
Conclusion and Recommendations Shareholders should NOT return a WHITE consent card. Shareholders should return the BLUE consent revocation card indicated "Yes, Revoke My Consent" on all three proposals. Shareholders should back the Board's previously announced plan for certain directors to resign, w
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