The Political Whore

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Another offer for CL: $13.3 million for entire chain, Tennessee developer says

February 4, 2009 at 11:16 pm by Wayne Garcia

From former CL Atlanta staffer Steve Fennessy writes in his Atlanta mag blog:

For those who think I’ve let lapse my casual obsession with the Creative Loafing Inc. bankruptcy, rest easy. There’s more news! Turns out that Brian Conley, who once owned the alternative newspaper in Knoxville, TN, and is now helping to finance the Sunday Paper’s expansion into other cities, has offered to buy all six papers in the Creative Loafing chain. Offer price? $13.3 million.

In a response to an email I sent him, Ben Eason, Creative Loafing Inc.’s CEO, said his company’s financial adviser, Bryan Crino, has been in touch with Conley. However, Eason wouldn’t characterize what reaction, if any, he has to the offer. “You can read any and all about CL on our websites when there is something to report,” he wrote in the email.

Because it’s in bankruptcy, CLI is under the watchful eye of a judge. So any move-and certainly one as major as a sale-would have to clear many hurdles. What’s more, Conley’s offer price is based on financial figures submitted by CLI last fall in court. Since then, those figures-basically, earning projections that provided the basis for Conley’s offer price-have changed dramatically. In court documents submitted recently by Creative Loafing, the company projects those earnings (called EBIDTA, or earnings before things like interest, taxes and amortization) for the current fiscal year to be $1.7 million. Conley says these latest figures may alter his offer price, which is usually based on a multiple of EBIDTA.

In any case, perhaps what’s most amazing is that there’s someone out there who sees a future in newspapers beyond a long, inexorable slide into obsolescence. I spoke briefly by phone this afternoon with Conley, who is primarily a real estate developer in Knoxville. He has dabbled in publishing, though, having owned for four-and-a-half years Metro Pulse, that city’s alternative weekly. Conley also founded Knoxville Magazine in 2006, which, like Metro Pulse, he has since sold. The obvious question is, when everyone else is running away from newspapers, why is Conley running toward them?

(The Sunday Paper had already offered $1 million for the Atlanta Creative Loafing.)

Read the full story here.