New Owners, New Life for Alt-chain Creative Loafing

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By: Shawn Moynihan

Optimism. Sometimes, it’s literally the difference between pass and fail. And in the case of Creative Loafing Inc., it’s one element that just might give it an edge over many of its mainstream contemporaries.

“There’s a renewed sense of wanting to go out and win,” says VP/Chief Sales Officer Alison Draper, who previously re-launched The Dallas Morning News’ youth-oriented Quick as a weekly, and in February was recruited to help put Creative Loafing back in the black. “We’re in full tilt.”

It’s a feeling shared by CEO Marty Petty, the former St. Petersburg Times and Hartford Courant publisher. “I can feel it when I move through the organization,” she says. Creative Loafing’s employees, she reports, “care a lot about their work, and want to do the best they can” under the company’s new ownership. “I think they’re very optimistic.”

To understand where this chain of alt-papers is at the moment, consider where it was in fall 2008. At that time, Creative Loafing was under Chapter 11 bankruptcy protection, and its editor had been fired. Staffers were being laid off, and editions were starting to get getting thinner and thinner. The alternatives had been hit with the same malaise affecting mainstream dailies with similarly bankrupt parents.

Then, Atalaya Capital Management LP, a New York-based private equity company that was the newspaper’s biggest creditor, was legally declared the company’s new owner last August after it nearly doubled a $2.3 million bid from former CEO Ben Eason, who had been trying to hold on to the chain his family founded.

Immediately after the bankruptcy, Atalaya sent interim CEO Richard Gilbert and, among others, board member (and former Los Angeles Times editor) James O’Shea — another name familiar to those who would rally against newsroom cuts — to CL’s papers in six cities. “They spoke to us about the transition — not just from old ownership to new, but from the current publication to an improved one — and how the staff would help determine what the company’s future would be,” recalls Mara Shalhoup, longtime staffer who in January was named editor in chief of Creative Loafing in Atlanta.

“They were speaking to a room populated largely by natural-born skeptics, and still, our impressions were that we were dealing with real pros,” she adds. “As one of my coworkers put it: ‘This is like the inauguration of Obama after eight years of George Bush.’”

These days, the chain is taking advantage of its versatility — CL publishes in Atlanta; Charlotte, N.C.; Chicago; Sarasota, Fla.; Tampa, and Washington, D.C., and hosts two national sites — and the goodwill generated by its new owners by having its top executives visit and meet with editors in each market to discuss ways to better build upon the company’s brands.

Petty, Draper and Henry Scott, Creative Loafing’s vice president and chief marketing officer who was named publisher for CL Atlanta in mid-May, went on on a whirlwind tour of the chain’s properties, meeting with the troops on the ground to strategize in each market. “This isn’t a cookie-cutter approach,” he says, noting its versatility in each of those markets. For one thing, he explains, “We’ve got tremendous flexibility in terms of distribution. And we’re able to shift that around any way we need. That’s a huge advantage that the free press has, that makes us more attractive to advertisers. We’re not burdened by legacy.”

There’s also the small matter of having Atalaya putting money into those products, and not stripping them. Says Petty, “In this business world that we all live in today, I think that’s a major investment, and that speaks volumes.”

The proof is in the new hires. The chain is adding staff in Atlanta, Charlotte,  Tampa, Chicago and D.C., says Scott, and future additions are expected.

Creative Loafing’s evolution has not come without its leadership changes. In late February, Erik Wemple announced he was leaving his post as editor of Washington City Paper for Allbritton Communications’ new local start-up in D.C. And in March, Draper took over as interim publisher for the Chicago Reader following the departure of James Warren — who joined the paper in November 2009 after having served as co-managing editor of the Chicago Tribune and, before that, its Washington bureau chief. He will focus on enhanced duties with the Chicago News Cooperative, for which he has been writing a column.

“Richard [Gilbert] was serving as temporary head of the enterprise when I took this great opportunity,” Warren wrote in a staff memo announcing his departure. “The CEO position was vacant and it was always a possibility that when filled, it might make sense for that person to assemble his or her own team.

“As I analyzed the needs of the Reader at this important moment in its history, I’ve decided to step aside and facilitate that process,” Warren added. “The paper needs a corporate team working in lockstep, especially at a time of great financial need.”

Still, “There’s very little fear here these days, and far more optimism,” says Shalhoup. “That’s not to say the pressure is off. The pressure is probably higher than ever, because the new management is devoted to improving the company on every level. That’s tough, and also exciting.”

“They’re all very strong brands in their markets,” Petty says of the company’s papers. Identifying areas of coverage to best serve the reader, she notes, and “understanding in each market what those look like and doing them very well is the work we’re doing right now.”

She adds, “In a lot of ways we’re not ‘print’ products anymore but we’re really 24/7 now, in these coverage areas, asking what does our audience want, and how do they want it.”

So the work goes on. But to hear Petty tell it, “As much heavy lifting as we’re doing, I can’t remember the last time I had this much fun. There’s a real sense of purpose, of making a difference, that to me is a really important part of what’s motivating all of us right now. These pubs matter. They matter a lot.”

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