Andisheh Nouraee submitted his resignation to publisher Luann Lebedz just hours after Lebedz fired editor Ken Edelstein yesterday, Atlanta Magazine's Steve Fennessy reports. Nouraee, who began freelancing for the paper in 2000 and joined the staff in 2007, says his decision was prompted only in part by Edelstein's dismissal. "What happened today is just one symptom of the overall reason, that I don't want to work there full-time anymore," he says. His last day will be Dec. 5.
Ken Edelstein was fired today after a decade as an editor at Creative Loafing's flagship paper, according to Atlanta Magazine's Steve Fennessy. Edelstein reportedly had a "heated meeting" last week with CL CEO Ben Eason over the implementation of further editorial cuts. "The meeting made it clear that Ben and I have very deep philosophical differences about what's best for the company and its employees," Edelstein tells Fennessy. More from the Atlanta Journal-Constitution.
Atalaya Capital Management, which lent CL's Ben Eason $30 million to buy the Chicago Reader and Washington City Paper, has filed a motion (pdf file) asking that Eason not be allowed to hire the investment banking firm Skyway Capital Partners to help him emerge from bankruptcy. The main thrusts of Atalaya's argument are that Skyway is not a disinterested party, that Skyway's role will extend beyond mere financial advising into possibly brokering a sale of CL, and that Skyway is not a competent financial advisor. More from the Reader's Michael Miner.
Last week, Creative Loafing asked a bankruptcy judge to authorize CEO Ben Eason to hire the investment banking firm that brokered the Reader/City Paper purchase to evaluate the company's business plan, seek new financing, and prepare the company to be sold if necessary, Atlanta Magazine's Steve Fennessy reports. Meanwhile, Eason's largest creditor, Atalaya Capital Management, asked the judge to lift the automatic stay that prevented CL from defaulting on its loan, arguing that the value of the company is falling with each passing day due to the bankruptcy filing and to "downward trends in the advertising industry." Eason tells Fennessy he stands by his decision to expand. "I think it's one of the smartest things we've done," he says. "I'd rather be navigating [the economic downturn] with Washington City Paper and Chicago Reader and [syndicated column] Straight Dope than without them." MORE: The Reader's Michael Miner weighs in, and City Paper consolidates its office into one floor.
To save costs in an ever-tightening economy, two of the three New Mass. Media papers will now share office space in New Haven. Staff members have been given laptops and cellphones and will seemingly be traveling in the Fairfield County area -- about 20 miles from New Haven -- quite a bit.
Creative Loafing Inc.'s CEO says former staffer Steve Fennessy's coverage of his company's bankruptcy filing is mistaken in several respects. Eason says that Fennessy is "mis-reading the strength of CL's open and resilient culture and how this relates to its financial and journalistic success," and that he is not accounting "for the fundamental macro issues facing media companies and their financial footings." Eason also admits that court documents (pdf) filed last week by Creative Loafing were mistaken: Its July-to-September revenues were $8.3 million -- not $3.5 million, as the document states -- with print revenue declining 15 percent and online sales up 180 percent during that period, on a year-over-year basis.
According to a case management summary (pdf) filed in Creative Loafing's bankruptcy proceedings on Monday, revenues are off at the six-paper alt-weekly chain. Atlanta Magazine's Steve Fennessy reports that when CL was looking for financing to purchase the Chicago Reader and Washington City Paper, it projected the expanded company would see revenues of $43 million in fiscal year 2008. But the court filing says that revenue in FY08, ending June 30, 2008, was $35 million, and predicts that sales in the first quarter of FY09 will be only $3.5 million. In other CL bankruptcy news, Washington City Paper has published a statement from one of the company's lenders, Atalaya, which says the bankruptcy filing was "unfortunate and unnecessary," and assures "all interested parties that Atalaya has no intention of attempting to shut down the business." MORE: City Paper editor Erik Wemple talks to the George Washington University student paper The Hatchet about the changes in store as the paper shifts focus.