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Sean Daly, Michelle Stark and Sharon Kennedy Wynne

Decision on future of Creative Loafing newspaper chain may be referendum on leadership

31

March

Beneason1_lg  A bankruptcy judge is expected to rule today on whether the biggest creditor for the Tampa-based alt-weekly newspaper chain Creative Loafing may take over control of the company.

And her final decision may come down to simple question: Is publisher Ben Eason's vision valid or not?

(Acccording to Loafing's Wayne Garcia, it seems a judge may have split the difference, allowing Eason to keep control of the company but suggesting the sides use mediation to reach agreement on a plan moving forward.)

That was also the question at hand back in mid 2007, when Eason borrowed $40-million and purchased the Chicago Reader and Washington City Paper for his chain, which includes Creative Loafing newspapers in Tampa, Sarasota, Atlanta and Charlotte, N.C. The news sparked a flurry of snarky commentary online and elsewhere, particularly when Eason stressed his focus on uniting the newspapers' Web sites into a nationwide platform for advertising.

Unfortunately, it now seems Eason bought the newspapers at the worst possible time -- just before the sub-prime mortgage meltdown would decimate the general economy and businesses that media outlets depended on for advertising business:  car dealerships, real estate sales, condo developers, employers with open jobs.

Creativeloafingcover When the chain filed Chapter 11 bankruptcy protection in September, Eason asked the court to keep creditor Atalaya Capital Management from taking control of the company.

During testimony delivered in March, Atalaya claimed the company lost value since its bankruptcy filing, in part due to a strategy focused on Web site advertising revenues, while Eason's side contends its creditors' analysis is wrong.

Some of the best reporting and commentary on these proceedings has come from Creative Loafing employees and former employees, including Tampa Loafing columnist Wayne Garcia, former Loafing reporter Alex Pickett, former Loafing copy editor Anthony Salveggi and fired Atlanta Loafing editor Ken Edelstein.

Those who were skeptical about Eason's strategy from the outset have grown more vocal in their criticism, while defenders insist the company's economic problems are a result of the disintegrating media economy that  has forced every significant outlet into cutbacks and layoffs in recent years.

I've been saying for some time now that these tough times are serious tests for media company management; if they have a dysfunctional process or difficulty adapting to new challenges, those flaws become immediately and seriously apparent in this environment.

Federal bankruptcy judge Caryl Delano is expected to make her own determination this afternoon, in a decision likely to be seen as a reflection on Eason's leadership and vision for the company.  

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[Last modified: Wednesday, July 21, 2010 2:56pm]

    

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