UPDATE 1-Bankruptcy judge approves Chicago Sun-Times sale

WILMINGTON, Del./NEW YORK, Oct 8 (Reuters) - A U.S. bankruptcy court judge approved the sale of the Sun-Times Media Group (SUTMQ.PK: 行情) to local investors on Thursday, giving its flagship Chicago Sun-Times newspaper a chance for survival.

James Tyree, chief executive of Mesirow Financial, received court approval to buy the company for $25 million. Tyree agreed to pay $5 million in cash and assume about $22 million in liabilities for the company's assets.

The operations include the Sun-Times, with its 1.3 million daily readers, and 58 other newspapers and websites in the Chicago area.

Tyree last month had threatened to walk away from the deal without union concessions. A key group of union members agreed to contract changes on Wednesday, which would allow the concessions to go through.

Newsroom union workers at the Post-Tribune of Northwest Indiana plan to vote on the concessions, including big pay cuts, on Friday, the Sun-Times reported on its website.

The Sun-Times Media Group used to be called Hollinger International Inc and was run by Canadian former media baron Conrad Black, who is now serving jail time for diverting Hollinger funds for his personal benefit.

The Sun-Times newspaper filed for bankruptcy earlier this year, joining Chicago's other major newspaper publisher, Tribune Co (TRBCQ.PK: 行情), in operating under court protection.

U.S. newspaper publishers have been hurt by severe advertising revenue declines as more people abandon print newspapers for the web and advertisers follow. The recession has accentuated those declines.

The case is In re: Sun-Times Media Group Inc, U.S. Bankruptcy Court, District of Delaware, No. 09-11092. (Reporting by Tom Hals in Wilmington and Robert MacMillan in New York)