Chicago News Cooperative shutting down

UPDATE: CNC is talking to the Chicago Sun-Times about a possible relationship.

Chicago News Cooperative employees were told late Friday afternoon that the non-profit news site is closing. The newsroom, which provides content to the New York Times, was launched in 2009. Managing editor James O’Shea says he asked the Times for financial support to keep CNC going, but the Times refused. Michael Miner writes:

CNC’s financial crisis came to a head last week, O’Shea explained, when the IRS issued a ruling that compromised the level of corporate underwriting and foundation support CNC could expect in the future. According to the IRS, tax benefits that would be received for funding particular projects would be denied if the funds were simply intended to sustain the operation. CNC’s primary financial lifeline has been the MacArthur Foundation, which has given it a million dollars.

* Chicago News Cooperative shutting down Feb 26
* CNC and Sun-Times are discussing a possible relationship