Our financial reorganization is drawing quite a bit of interest from all over the place (on the same day, unfortunately, that the Tampa Tribune is laying off a few more workers, including editorial page columnist Joe Brown). Here’s a sampling:
It is the unfortunate direction of all print media. Newspapers, magazines, and such media depend on advertising to survive. Why would someone want to pay $10-30 for 3-4 lines of text in classified advertising when a free ad with unlimited text, anonymized response links (so unknowns do not call your home), and multiple photos on a place like Craig’s List [tampa.craigslist.com]? The Tribune, TBT, and Creative Loafing still get more overall local readers, but until they update, they cannot compete. One would think by now the Tribune would even have special links in the ads so that those that pay to list them can have pictures added online.
I like Creative Loafing because of the activity listings and local stories (the Tribune seems to have little real local content that isn’t focused on car crashes, press releases, or celebrity news). When is the last time anyone recalls the Tribune really doing an in-depth, politically dangerous expose on any subject? They did have a long article regarding accidental arson in Plant City years ago, but I wouldn’t really term that as an expose. — comment on tbo.com
Eric Deggans reports on a dispute between CL and one of the investors who financed the Chicago-Washington purchase last year:
Despite a story on the Washington City Paper Web site quoting Creative Loafing Inc. president Ben Eason saying “this filing has little to do with the acquisition,” documents included with the bankruptcy filing indicate the company had trouble keeping up with payments on a $30-million loan taken last year to pay down $15-million in debts and to purchase the two newspapers.
According to documents included with the bankruptcy filing, Creative Loafing missed an interest payment of $282,219 on Dec. 24, a $10,000 servicing fee on Dec. 31 and an interest payment of $294,369 due Jan. 24.
Also according to the documents, as the media economy grew worse, Creative Loafing negotiated agreements to modify the financing terms with Atalaya Funding in New York and BIA Digital Partners. But last week, Atalaya said the company was in default, though Creative Loafing disagrees, according to the court document.
Creative Loafing has asked the court to prevent Atalaya or Atalaya and BIA from taking control of the company, allowing Eason to focus on reorganizing to better meet its debt obligations and develop the online revenue sources prompting the Reader and City Paper purchases.
From Erik Wemple, editor at our sister Washington City Paper:
The move does contain good news for editorial departments in the chain. Eason announced that cuts to edit staffs at all the papers would be rolled back but stressed that all the papers should proceed with “Web-first” publishing strategies, in which writers and editors customize their content for the Internet and subsequently transfer that content into their print products.
From The Business Journal in Tampa Bay:
The bankruptcy filing comes the same day Creative Loafing sued Atalaya Administrative LLC, Atalaya Funding II LP and BIA Digital Partners SBIC II LP asking a judge to stop a default on $40 million in loans. In the suit, filed with the same court, Creative Loafing said the lenders failed to act in good faith when they refused to negotiate lowering the financial covenants. Without the injunction, Creative Loafing says it has no other options in stopping the default, as it would be “too late to save the debtors’ businesses, reputation, and close-knit and effective management.”
From paidcontent.org at Washington Post:
Likely means the BIA funding went south, somewhere along the line, as of course did the company’s fortunes. The company also denies any connection between the acquisitions last year and Ch 11, and says there won’t be any major layoffs…lotsa spin in there, if you ask me.
From our sister Chicago Reader:
In a telephone conversation with executives of his newspapers, Eason sounded relentlessly chipper, and he emphasized that all his company seeks from bankruptcy is the opportunity to restructure its debts. Liquidation is not being considered. “This is a profitable business,” he declared. “The company has a good cash flow. It has a good market position. Online revenues more than doubled in the last year.” But print revenues have fallen off dramatically over the past year at Creative Loafing and throughout the newspaper business. He said in the past three months total revenues were down 10 to 15 percent from the same months a year ago.
The douchebags at Philebrity:
Food for thought: So Creative Loafing, an alt-weekly chain/parent company thing that mostly covers cities you would not live in with even with somebody else’s dick, totally screwed the pooch and declared bankruptcy so that its papers — including Washington City Paper — can better “focus” their efforts online. You can see where we might be going with this: With the Philadelphia Weekly having been rumored to have slashed its freelance budget entirely (no shit! more on this later!) and the City Paper spectacularly lunching its most spectacular issue of the feckackular year, is this a trend that might look juicy to guys like Paul Curci and Anthony Clifton? Our guess: Not yet, but it will.
The Gawker:
This may be just a foreshadowing of some painful days to come for alt-weeklies in general—we also hear the Village Voice may be on the verge of some layoffs.
It was A Tale of Two Media Companies as Creative Loafing CEO and President Ben Eason testified Thursday afternoon during a hearing to determine whether he keeps ownership of the alt-newspaper chain.
