Presentation

The Backdrop

Under the leadership of the current CEO and Board, a

once venerable franchise has deteriorated significantly and

a potential bankruptcy now looms. In our view, these

directors neither possess nor have demonstrated the

media and restructuring talent necessary to rescue the

Company from its current financial crisis. New leadership

with the requisite turnaround expertise is urgently needed.

Repeated attempts by Davidson Kempner to achieve

consensually a reconstituted board with the appropriate

expertise have failed.

Sun-Times: A Franchise in Crisis

•

SUTM’s

revenues have been declining at a

10% CAGR since January 2005

•

2008 will be the third year in a row of negative

EBITDA

•

The Company’s cost structure is out of control.

Management’s $50MM cost-cutting effort in 1H

2008 is best described as “too little, too late”

–

Gross margins have dropped 10 points since 2005

–

Overhead costs have increased 12% since 2005,

despite a 27% drop in revenues

–

The Board has offered no clear guidance on how to

fix a bloated cost structure (COGS + overhead) that is

now 112% of revenues

Sun-Times

performance

has rapidly

deteriorated

in recent

years

Bankruptcy Looms with Dwindling Liquidity

•

The Company has been burning $20MM of

cash per quarter on average since 2006

–

Liquidity bolstered by $130MM of asset sales since

2005

–

Despite asset sales, cash balance still declined from

$250MM in January 2006 to below $100MM in

September 2008

•

At the current cash burn rate, we believe Sun-

Times may have less than 12 months of liquidity

remaining

•

The cash hemorrhaging is remarkable for a

media business with virtually no outstanding debt

Sun-Times

may run out

of cash in

the next 12

months

Shareholders Suffering Under Current

Regime

•

SUTM’s

share price has declined 99% since

January 2006.

•

The shares are currently trading at 4 cents.

•

No resolution on outstanding $600MM IRS

claim means no prospect of a sale of SUTM

•

Plan to de-register the stock will result in

significantly less liquidity for SUTM

shareholders

Shareholders

have seen the

value of their

holdings

virtually

wiped out

Current Board Adrift During Crisis

•

Current SUTM board largely comprised of ex-

bankers and money managers

•

No discernable plan and no sense of urgency

on how to address operational issues. No plan

to create value for shareholders (management

no longer holds quarterly earnings calls)

•

Directors (excluding Robert Poile who

represents Polar Securities) own less than 1%

of shares outstanding

•

No visibility on succession for directors Seitz,

Savage, and Paris

We believe

the current

directors

are not

capable of

addressing

the

Company’s

problems

Our Proposal

The directors who have presided over the deterioration of

Sun-Times do not possess the skills or experience to

rescue this business, in our view.

The shareholders, employees, and readers deserve better.

The Company urgently needs new leadership and a new

direction to preserve Sun-Times for all stakeholders.

Our Plan to Save Sun-Times

•

We have a 3-pronged approach to

resuscitating this business

–

Stop the cash burn

–

Resolve the IRS Claim

–

Reposition the Company

•

We are proposing independent director

nominees with the deep publishing and

restructuring experience required to implement

this plan

Our plan is

designed to

preserve the

Company and

enhance

value to

shareholders

Step I: Stop the Cash Burn

•

Before anything else, we must stop the negative

free cash flow

•

The key is intelligently reducing SUTM’s

operating footprint and being more aggressive in

reducing overheads

–

We expect that the reconstituted board will focus in

particular on pursuit of new joint-venture opportunities

which will allow us to outsource certain functions

including printing, distribution, accounting, IT and

human resources

–

The Company will continue to focus on the core

competencies of news gathering and local advertising

sales with attention paid to optimized pricing and

leveraging the network of ~70 community newspapers

The

reconstituted

board will

bring a fresh

approach to

cost-cutting

and

restructuring

Step II: Mitigate the IRS Claim

•

Sun-Times faces a $600MM claim from the

IRS stemming from under-reporting of income

during the Black/Radler

years

•

Under the existing board this claim has not

been mitigated or resolved

•

We believe a unique window of opportunity

may exist to address this claim with the new

administration in Washington

•

We expect the reconstituted board to enlist

specialist advisors to assist in this effort

Resolving the

IRS claim will

unlock

significant

value for

shareholders

Step III: Reposition the Company for

Growth

•

Sun-Times has not taken full advantage of its

most valuable assets: its brand, its reach, and

its people.

•

A range of interesting opportunities exist to

extend the franchise in community newspapers,

internet publishing, and online community

networks and monetize these channels

including audio and video technologies, mobile,

search, business directories, behavioral and

geographic targeting and self-service

advertising

•

We will be looking to the new directors to craft

a plan to exploit our capabilities in these areas

and take advantage of the shifting marketplace

Sun-Times

needs a

strategic

repositioning

from a

collection of

newspapers

to a collection

of news

brands

The Reconstituted Board and Our Role

Davidson Kempner is an investor in, not an operator of,

troubled businesses.

We will look to the reconstituted board, including the

independent nominees we are proposing, to craft a

detailed plan to stabilize Sun-Times and position it for

future growth.

The Reconstituted Board: Jeremy Halbreich,

Nominee

•

24 years experience at Dallas Morning News,

including positions of President and General

Manager

•

Founded American Consolidated Media,

owner/operator of 100+ community

newspapers. Sold company in 2007

•

Well-known figure in newspaper publishing

and member of various industry associations

Mr. Halbreich

brings a

wealth of

industry

experience

and credibility

to the Sun-

Times board

The Reconstituted Board: Robert Schmitz,

Nominee

•

Partner of Quest Advisors, a reputable

turnaround advisory firm

•

Previously lead restructurings at various media

firms including PTV, Cablecom, Spectran, Optel

•

Former Managing Director at Trust Company

of the West where he oversaw a number of

community newspaper groups

•

Former Vice President at Dow Jones advising

on restructuring of Wall Street Journal. Also

former partner at McKinsey & Co.

Mr. Schmitz

possesses a

valuable

mixture of

publishing

and

restructuring

experience

The Reconstituted Board: Michael

Katzenstein, Nominee

•

Founder of CXO LLC, a restructuring advisory

firm

•

Led restructurings of Pacific Crossing, Pac-

West Telecom, CTC Communications, and

Optel

•

Current Chairman of RCN, large cable

overbuilder

and CLEC

•

Frequently serves in role of Chief

Restructuring Officer

Mr.

Katzenstein is

a well-known

turnaround

expert and

Chief

Restructuring

Officer

The Reconstituted Board: Robert Poile,

Director

•

Represents a large SUTM shareholder with

11% stake in the Company

•

Joined the Board in June 2008

•

Ten years operating experience in various

operational restructurings

•

Experienced distressed investor

•

Supports our proposal to change SUTM

leadership

Mr. Poile is

affiliated with

a large Sun-

Times

shareholder

and an

experienced

director of the

Company

Conclusion

We believe the current Sun-Times board does not possess

the skills or experience to revive this company, or its share

price.

Our proposal to reconstitute the board is intended to

introduce independent directors with the necessary media

and turnaround expertise. Leadership of this type is

imperative in our view if shareholders wish to create value

for their equity and avoid a potential bankruptcy over the

next 12 months.

We urge Sun-Times shareholders to use the WHITE

consent card to submit their consents TODAY.