No Joke: East Coast Firm Close To Purchasing Second City Theater

CHICAGO — The Second City Theater, the launching pad for Tina Fey, Chris Farley and John Belushi that made Chicago comedy's Mecca, could get a new owner, according to a published report.

Financial Times on Tuesday reported Strauss Zelnick's private equity firm could reach a deal "as soon as this week" to purchase the comedy company for around $50 million.

Zelnick is the Boston-born chief executive and managing partner of ZMC, a private equity firm. He also is the chief executive of Take Two Interactive, a video game holding company that owns games including Grand Theft Auto and NBA 2k, among others.

Second City, which has been privately owned for all of its 61-year history, was put up for sale in October, a move that co-owner Andrew Alexander said aimed to position the company to succeed in the future.

"What we are seeking is critical re-investment in the business that will allow us to continue to grow in the right ways and with the right resources while remaining an oasis of speaking truth to power and providing vital human connection in an increasingly complex world," Alexander said in the statement released by Los Angeles investment bank, Houlihan Lokey, which is advising Second City's owners on the sale.

Due to the coronavirus crisis, Second City suspended all its shows and classes in early March. Second City also faced controversy in June when Alexander stepped down from the training and performance troupe due to allegations of racism within the company.

Second City is co-owned by Alexander and D'Arcy Stuart, although its president, Steve Johnston, also has a small equity share. When he stepped down, Alexander said he was going to sell his half of the theater. The two decided rather than try to sell about half of the institution, it makes more sense to market the entire operation. The theater was sold once before in the years after Bernie Sahlins, Howard Alk and Paul Sills launched the comedy theater in 1959.

The theater has several arms beyond its main stage theaters in Chicago and Toronto, including a long-standing comedy training school, a film school and a corporate division that has maintained much of its revenue by offering online training and education to clients.

Second City was an early training ground for "Saturday Night Live" players including John Belushi, Dan Aykroyd, Gilda Radner and Chris Redd, among other comedy stars. The company produced the "SCTV" TV series in the 1970s and '80s.

Associated Press contributed.