TORONTO — At the Hollinger group's peak in the mid-1990s, Conrad Black controlled one of the world's biggest newspaper empires, including the London Daily Telegraph, Jerusalem Post, Chicago Sun-Times and dozens of Canadian and American publications.

But even before Black's fall from power in late 2003 and early 2004, amid a financial scandal that resulted in his criminal trial in Chicago - which begins opening statements Monday - Hollinger was selling many of the papers acquired in a buying spree throughout the 1990s.

Most notable from a Canadian prespective was Black's decision to sell most of Hollinger's biggest papers here - and half of the National Post - to Winnipeg's CanWest Global Communications Inc. (TSX:CGS) about six years ago.

Richard Siklos, author of Shades of Black, says the Canadian-born businessman has argued that he had already recognized the newspaper business was "challenged" and was quietly "trying to get out of most of Hollinger's interests, starting with the Canadian newspapers in 2001.

"I'm not saying you have to take that at face value," Siklos said.

"It just so happens that if you accept that, he turns out to be somewhat right. Some of the things going on in the United States, in particular, have showed it's tough times for newspapers around the world."

However, even with the CanWest sales and smaller divestitures, Black still retained control of a major newspaper business in November 2003 when the first of the public accusations of financial wrongdoing were levelled at him by a special committee of directors at Hollinger International, his Chicago-based operating company.

In the intervening years, however, the Telegraph and Jerusalem Post have been sold to different buyers as have smaller Canadian newspapers, including the Sherbrooke Record, that remained in the Hollinger group after the CanWest deal.

All of the many companies that Black once controlled - including Ravelston Corp., Argus Corp. and Hollinger Inc., all based in Toronto - are now run by outsiders.

In addition, real-estate such as Black's landmark former headquarters at 10 Toronto St., works of art that adorned Hollinger offices, luxury items including a vintage Rolls Royce and other assets held by various Black companies, have been sold for cash.

"As far as the empire goes, I guess it has been pretty much scattered to the wind with the exception of the Sun-Times," Siklos says.

The Chicago Sun-Times, the No. 2 paper in the third-biggest city in the United States, is the flagship of the former Hollinger International, now called Sun Times Media Corp.

As with most, if not all, of the major daily newspapers in the United States, the Sun-Times has been hurt by declining advertising and circulation revenues from the rise of Internet and digital media.

For the first nine months of 2006, according to the most recently available report, Sun Times lost nearly US$26 million and saw its revenues decline nine per cent compared to the previous year to US$308.9 million.

"That company is in sad shape," says Porter Bibb, managing partner of Mediatech Capital Partners in New York.

He notes Sun-Times has scheduled an investors day for April 4 to disclose its business plan for 2007-8.

"I would call it more of a survival plan than a business plan," Bibb says.

Sun-Times Media's biggest asset, in Bibb's opinion, is nearly $1-billion worth of losses on its books, which would be of interest to private equity investors who, with a little deft accounting, could shelter profits from other media holdings.

"There are constraints and probably the IRS would fight any attempt to use the billion-dollar tax loss," Bibb says, adding that "there are smarter accountants on the side of private equity than there are at the IRS."

Bibb also counts more than 100 small community papers in the Chicago area as potentially valuable, but he doesn't consider the better-known Sun-Times itself as a major asset.

"Conventional wisdom here is that newspapers are yesterday's news. They're a mature industry that have no chance of ever recovering and they've been steamrollered by the digital revolution and the Internet," says Bibb, whose firm specializes in investing in media companies.

"Whether you're the Tribune Co., Washington Post or the New York Times, you're in dire straits right now. At least from the investor community perspective."

Sun-Times shares, which remain the chief asset of the Hollinger group, have also declined to US$5.11 a share on the New York Stock Exchange, down from US$8.60 last March and about US$20 in April 2004 when the whole company was on the auction block.

The London Daily Telegraph, which was acquired by Black in the mid-1980s and restored to profitability, was sold in 2004 over Black's protests for about US$1.2 billion.

Some of that money flowed to Hollinger International's shareholders, including Hollinger Inc., which was forced to put its shares into escrow pending the outcome of numerous lawsuits.

Without the Telegraph, and given the losses at its Chicago daily, Sun-Times Media has suspended dividend payments to shareholders, including Hollinger Inc., which owns 19.7 per cent of the U.S. company.

Hollinger Inc. said recently that its own future is in doubt.

The Toronto company showed a loss of $22.7 million in the October-December quarter. What's more, there are $245.6 million of liabilties on its books - and assets valued at just $172.2 million as of Dec. 31.

"The corporation's ability to continue as a going concern is uncertain," Hollinger has said.

Siklos has actually written two books on Black and Hollinger - one when the company was the fastest-growing newspaper operator in the world and one after Black's downfall.

"The second book," he says, "was motivated entirely by my own personal astoundment."