Brutal article on Creative Loafing

[leander]

I put this in the Pit for obvious reasons. Apparently there have been a new round of firings that have left some folks a bit upset.

Article here: http://www.sundaypaper.com/More/Archives/tabid/98/articleType/ArticleView/articleId/3375/Default.aspx

The latest casualty in CL’s ongoing train wreck is editor Ken Edelstein, one of the best journalism “brands” in Georgia. After 10 years at the paper, he has a fan network of state and local heavyweights that is irreplaceable. He was fired last week for the fatal sin of disagreeing on the further dismemberment of the editorial section.

<snip>

In 2000, Eason paid far too much for his family’s papers. He was forced to borrow up to the full value of the company and then bring in Cox Newspapers as an “equity partner” to pay for the rest. When that marriage soured, Cox exited with a good return on its money, leaving CL swamped with debt.

<snip>

When Eason’s piranha-like investment advisers pitched acquiring the Chicago Reader and Washington City Paper to lenders last year, they wrote a glowing analysis that claimed, despite falling revenues, that the combined company would grow from $43 million in 2007 to almost $48 million in 2012. The company’s blue-ribbon board of directors clearly didn’t buy the pitch—the entire board, with the exception of Eason, quit.

Then the big “oops” happened. In the year that closed last June, revenues had fallen to about $36 million. They are now headed for less than $30 million, and may hit a $20 million annual level in the near future. Eason has had trouble paying the loans almost from the day the deals were done. The value of the company is in freefall.

<snip>

Creative Loafing filed for bankruptcy on Sept. 29. Eason had pledged his controlling interest in the company to get $30 million in loans now held by an investment company called Atalaya, and there were additional pledges to a second lender, BIA Digital, which anted up $10 million. The deal was that if Eason defaulted on the larger loan, Atalaya had the right to take over the company. Eason did default, and then basically told the bankruptcy court in Tampa that he had his fingers crossed when he signed the pledges.

In the end, the big losers are the readers. As CL fired brilliant journalists at its papers, the content eroded to a state that can only be called pathetic. The latest “strategy” is to rip off articles and blogs from real content producers and paste them onto CL Web sites. Major “innovations” have included the creation of porn Web sites—just what the Internet needed more of.

Not good, though it does explain a few things…

[Quartz]

The SDMB should be a gold mine, then. I sure hope Jerry, Ed, and the rest are going to be okay.

[Rhubarb]

[Bette Midler] We’ve been kidnapped by K-Mart![/BM]

[Shayna]

Ugh. Well, at least maybe I’ll get more work done during the day when this folds. It’s been nice knowing y’all.

[RTFirefly]

The way I figure it, whoever winds up with control of the SDMB will either figure out how to make some money from it, or sell it.

IIRC, manhattan offered to buy the board when it first cried ‘poverty’ 7-8 years ago. While manny and I haven’t always seen eye to eye, I’m sure he could run this board better than the current management has done.

Of course, who knows whether manny would be remotely interested after all these years. An alternative would be for us Dopers to form a corporation (a nonprofit, I’d expect) to buy and run the board, should push come to shove.

[Cluricaun]

@RTFirefly

The way I figure it, whoever winds up with control of the SDMB will either figure out how to make some money from it, or sell it.

IIRC, manhattan offered to buy the board when it first cried ‘poverty’ 7-8 years ago. While manny and I haven’t always seen eye to eye, I’m sure he could run this board better than the current management has done.

Of course, who knows whether manny would be remotely interested after all these years. An alternative would be for us Dopers to form a corporation (a nonprofit, I’d expect) to buy and run the board, should push come to shove.

The Teeming Millionaires?

Anyone have any idea how much this board would be worth?

[smiling_bandit]

Its “worth” depends on a lot of factors, including costs to run it, administration, tax codes and complications, and expected income. Suffice it to say that even today internet business is a sufficiently hazy area as to render any flat number could give meaningless.

[The_Tao_s_Revenge]

I bid 1 dollar

[Jonathan_Chance]

You all may be kidding but people like RT should know that acquiring and selling newspapers is my living.

Hmm.

[E-Sabbath]

Tree fiddy!

[Tuckerfan]

The figure I’ve heard for valuing a website, etc. is $20 per user, though some people will put the cost as high as $100.

[Dijon_Warlock]

@smiling_bandit

Its “worth” depends on a lot of factors, including costs to run it, administration, tax codes and complications, and expected income. Suffice it to say that even today internet business is a sufficiently hazy area as to render any flat number could give meaningless.

Agreed on all of those, but there’s also (but not only) content to be considered. Historical value (remember NYC Dopers’ postings on and after 9-11?), factual value (as ignorance fighters, this place is a veritable mini-Wikipedia), as well as entertainment value (The Zit Thread, Very Vaguely Creepy threads, If Someone Else had written LOTR, to name/pararepresent but a few). This place is and has been a cultural vortex of what is best and worst of what goes through people’s minds; and as such, has value in that respect as well. To reduce it to mere financial numbers may (regretfully) be necessary, but I would hope that whatever Powers-That-Be realize how short-sighted that is.

[GuanoLad]

@Jonathan_Chance

You all may be kidding but people like RT should know that acquiring and selling newspapers is my living.

You work at a Newsagent?

[Jonathan_Chance]

Har Har. I’ve spent the last 15+ years running, fixing, and buying and selling publications. I currently own two weekly newspapers and the plan is to acquire up to 15 more, streamline them and find a buyer.

Hey, it’s what I do. Not all of us are students, you know. Some of us are broken down, middle-aged professionals.

[astro]

@GuanoLad

You work at a Newsagent?

Oh Suh-NAP! JC is a respected doper, but that *was *funny.

[leander]

@Jonathan_Chance

Har Har. I’ve spent the last 15+ years running, fixing, and buying and selling publications. I currently own two weekly newspapers and the plan is to acquire up to 15 more, streamline them and find a buyer.

Hey, it’s what I do. Not all of us are students, you know. Some of us are broken down, middle-aged professionals.

I would assume that now is a pretty good time to be doing what you are doing (so long as you are cashed up). Is that correct – is it a buyers’ market?

Also, do your two weeklies have any web presence attached to them, and if so how does that add to/affect the value?

[Cat_Whisperer]

@Shayna

Ugh. Well, at least maybe I’ll get more work done during the day when this folds. It’s been nice knowing y’all.

We have a contingency plan already - Teemings - the virtual SDMB refugee camp.

Reading that article, I don’t get a feeling that we’re in good hands here. I have a feeling that another shoe is going to drop someday. See you all at Teemings!

[Jonathan_Chance]

@leander

I would assume that now is a pretty good time to be doing what you are doing (so long as you are cashed up). Is that correct – is it a buyers’ market?

Also, do your two weeklies have any web presence attached to them, and if so how does that add to/affect the value?

Cash is always the headache. Building relationships with banks and with deep pockets is more than half of my job these days. It’s more than necessary.

Yes, however, it’s a good time to be in the acquisitions market if you know what you’re doing. It really centers on weekly newspapers and cutting overhead. Particularly with a fleet of publications you have to look for places to share copy. What general interest columns can you pay for once and share across all of your pubs? Pets? Food? Antiques? Our antiques column is easily the most popular feature we have. I, myself, write the political columns and OpEds each week after consulting. Over time you can leverage those through syndication as well.

Beyond that make sure you cover local news, particularly focus on local government and economics and you should be able to find a niche. Utterly ignore the national and international scene. If people want to hear about the War or such they can go to television or the web…you have to give them stuff not found there.

For our web presence I keep it light intentionally. The goal is to make money with advertising and if I give the content away I undermine that overriding goal. Even so, with a market of about 75K people (two cities, about 15 miles apart) we have over 10K unique visitors each week. It’ll do. And it lets us compete with the existing dailies for breaking news when necessary.

One thing that HAS to stop: I read in another story about CL that one of there papers had several ‘Senior Writers’ each working for 4-6 weeks on major feature stories. A writer was complaining that this is coming to a half. Well, it HAS to. You need to be able to provide good, clean copy in less than a week on complex subjects for your readers. The old days are done and those who can’t adapt should go do something else. Each of my writers (four spread over two markets, not counting the columnists) produce 2-6 stories per week of between 500-2000 words each. At one point my Managing Editor was producing 8000 words per week on hard subjects to cover. There’s no room for weeklies in a newspaper designed to survive.

[hajario]

@Dijon_Warlock

Agreed on all of those, but there’s also (but not only) content to be considered. Historical value (remember NYC Dopers’ postings on and after 9-11?),

Yeah, here and about a thousand other places too.

factual value (as ignorance fighters, this place is a veritable mini-Wikipedia),

OK, but there is already Wikipedia for that.

as well as entertainment value (The Zit Thread, Very Vaguely Creepy threads, If Someone Else had written LOTR, to name/pararepresent but a few).

Yeah, here and about a million other places too.

This place is and has been a cultural vortex of what is best and worst of what goes through people’s minds; and as such, has value in that respect as well. To reduce it to mere financial numbers may (regretfully) be necessary, but I would hope that whatever Powers-That-Be realize how short-sighted that is.

This place had proven not to be a big money maker and only had value to those of us who post and read here which is really not all that many people. There are probably a few of us here who could afford to buy the place and run it at a slight loss or break even out of charity.

I guess The Barn House was too little, too late.

[Jonathan_Chance]

Yeah, I’ve got to concur with that. While I approve (from a professional standpoint) the efforts of the CL staff to find ways to monetize the boards and such I have doubts about it being a worthwhile endeavor as a standalone project.

The value comes from the tie-in to the papers and the syndication of the Straight Dope column. That’s your front line sort of item there, not one more message board.