New Media Hub reports that Creative Loafing has trained some reps to buy and resell ad networks for key local display advertisers. CL joins Village Voice Media, which launched its Voice Local Network in June, in selling local ad networks. VVM new media director Bill Jensen says the company's network focuses on advertisers that align with the papers' main areas of focus, which helps set it apart from other ad networks. "When you are looking for music or a restaurant, things that are at the core of our business, you are looking for a little bit more than text ads," Jensen says. "We have the best food critics in the world. Its different if you are looking for a plumber."
A federal bankruptcy judge scheduled the auction for Aug. 25 after Creative Loafing CEO Ben Eason and the chain's largest creditor agreed on a reorganization plan, reports Creative Loafing Tampa's Wayne Garcia. Under the plan, Atalaya Capital Management LP will take a $19 million haircut, writing down the value of the loan it made two years ago to Eason to $12 million. Atalaya still plans to battle Eason and his allies for ownership of the company and has already put in a $2 million "stalking horse offer" that constitutes "the first bid up during the Aug. 25 equity auction," according to Garcia.
Kirk MacDonald, who was also COO of Creative Loafing Inc., is leaving the company to rejoin the Denver Newspaper Agency, which controls the business operations of the Denver Post, as executive vice president for sales, marketing, and digital sales. MacDonald, who joined the Reader in September 2008, says CL CEO Ben Eason will take over the COO duties temporarily, and that a new publisher will be named for the Reader.
The Creative Loafing CEO tells Editor & Publisher that bankruptcy has given the six-paper chain the opportunity to speed its transformation to digital publishing and to cut its costs. He says that his staff is spending 90 percent of its energy on the web and the other 10 percent on print -- which would be impossible without bankruptcy. "Everyone in the business knows print pays the bills, but most folks don't understand that digital contributes to the profits," he says. In a pre-Chapter 11 company, "the profit expectation baked into the capital structure is entirely based on maintenance of historical print profit margins." Eason also says he expects CL to emerge from bankruptcy this summer.
Judge Caryl E. Delano has ruled in the CL CEO's favor, denying major creditor Atalaya's motions to take control of the company, Wayne Garcia of Creative Loafing (Tampa) reports from the courthouse. Though Eason will retain control, the judge is suggesting mediation for the two sides to come up with a mutually compatible reorganization plan instead of using the one put forth by Eason earlier in the bankruptcy proceedings.
The federal bankruptcy judge overseeing the case is expected to rule by Tuesday of next week, according to Creative Loafing Tampa, which has posted PDFs of the closing arguments on its website.
After hearing more testimony yesterday on whether CEO Ben Eason should retain control the six-paper chain or if it should be turned over to its biggest creditor Atayla Capital Management, Judge Caryl Delano Delano said she will ask both sides to submit written closing arguments, which she will mull over for several days before making a ruling. MORE: Read dispatches from former CL employees Ken Edelstein and Alex Pickett.
Ben Eason testified yesterday during a hearing to determine whether he will be able to maintain ownership of the six-newspaper chain or if it will be handed over to CL's largest creditor. According to Wayne Garcia, much of Eason's testimony related to the digital transformation of CL and the struggles of the print publishing industry. On Tuesday, CL's chief financial officer and its valuation expert are scheduled to testify. The judge will then rule on who gets control of the company, Garcia reports.
Atalaya Capital Management said in court this morning that if it assumed control of the six-paper chain, it would continue to operate the newspapers "as a going concern" and put more money into the company rather than sell it off, Wayne Garcia reports. Atalaya, CL's biggest creditor, is seeking to wrest ownership of the company from CEO Ben Eason because it has "lost confidence" in his management. MORE: Later in the day's hearing, an expert on valuation testified that CL's value as a company had dropped more than $7 million in the three months after it declared bankruptcy. CL will make its case in court on Thursday.
Starting in April, the six-paper chain will cut executive compensation by five to 15 percent, Washington City Paper's Erik Wemple reports. On a conference call today, COO Kirk MacDonald said that he and CEO Ben Eason will take the 15 percent cut and that others -- including publishers, sales executives, and top editors -- will get more moderate slices. Wemple is glad he didn't have to implement another round of layoffs. "This approach makes way more sense," he writes. "No depressing discussions with the staff today!" MORE: The Chicago Reader and Creative Loafing (Tampa) weigh in.
