Media Chapter 11 Loafing
posted by October 7 at 10:51 AMon
Last week, Atlanta-based alt-weekly chain Creative Loafing (recent purchasers of the Chicago Reader and Washington City Paper) filed for chapter 11 bankruptcy. Atlanta Magazine has a grim look at the perfect storm of bad news that hit the company in the last three months (declining ad sales, rising gas prices, tanking economy, etc.) as well as its probable future (spoiler alert: online content aggregation!):
Unfortunately, the purchase of the Chicago and D.C. papers couldn’t have come at a worse time. The housing market was crashing, which cut advertising revenues by up to fifteen percent. “It wasn’t the nightclubs or the retail stores,” he said. “It was housing. Furniture was just gone.” And Eason’s cost-cutting measures—like centralizing production of all the papers out of Atlanta—wasn’t saving enough money to offset the losses. Earlier this year, he ordered more layoffs at his papers. But it wasn’t enough. This summer, with gas prices creeping up, ad sales took an even bigger hit.