Thursday, May 29, 2003 — The Board of Directors of Creative Loafing, Inc., publisher of four alternative newspapers in the South, has voted to look into the actions of two of its directors from Cox Newspapers, Inc. related to Cox’s launch of “accessAtlanta” as a direct competitor to Creative Loafing, the Atlanta weekly.
The Board voted six to one to form a special committee to carry out the investigation, acting on a motion presented by Ben Eason, chairman of Tampa-based Creative Loafing. One director from Cox, which owns a minority interest in Creative Loafing, opposed the motion and his Cox colleague was absent from the meeting.
The special committee is charged with investigating the conduct of directors Jay Smith and Charles “Buddy” Solomon with respect to any participation they had in the planning, implementation and direction of accessAtlanta in competition with Creative Loafing publications in the Atlanta market. The committee is expected to report to the Board its findings and recommendations for further actions, if any, within 90 days.
The outside directors of Creative Loafing agreed to form this special committee. Five of the eight directors are shareholders but are not affiliated with Cox nor employees of Creative Loafing: Bruce Samson, Sterling (Jim) Soderlind, Dick Mandt, Barry Alpert and Gerry Hogan. The special committee selected Mr. Mandt to chair this committee.
Mr. Eason said: “Something doesn’t seem right with regards to the conduct by Jay Smith and Buddy Solomon in relation to the launch of a competitor while serving on the board of the company that the competitor is designed to squash. This just doesn’t sit right with me and obviously the outside directors feel the same way.” Mr. Smith is president of Cox Newspapers with direct oversight of the Atlanta Journal-Constitution.
Mr. Mandt said: “We understand as a committee what work lies ahead and look forward to an open and frank discussion about the issues we need to look at.”
“Creative Loafing in Atlanta will continue to be a vital part of the community in Atlanta, serving readers and advertisers in this market. Our circulation is up substantially over the past two years, our editorial has become stronger and our revenues have increased in a tough market — it looks like someone over at Cox has been paying attention to us,” said Mr. Eason.