Tuesday, September 30, 2008

Chicago Reader deathwatch part 1000

Fitting perhaps that on the day that the Chicago Tribune redesign went live, the year-old owners of the Reader, Chicago's long-running alternative weekly paper, announced they were filing for bankruptcy protection.

Now the sale of the Reader is a topic I've covered extensively here, so there's a lot of backstory to catch up on. The short of it (for those not willing to follow those half-dozen links) is that the once-profitable paper was at the center of a converging media landscape that had the Tribune's Red Eye commuter paper on one track, Time Out Chicago on another, and Craigslist on a third. There was no real expectation of survival--the paper's prime had long passed it by--and the owners sold the paper to the Tampa, Florida based publishers Creative Loafing who still, just over a year since I first learned their name, causes a cringe in me every time I hear it.

Now bankruptcy protection is different than bankruptcy itself (yes, by all of one word) as Creative Loafing (ugh) owner Ben Eason is quick to point out to the Chicago Reader's own Michael Miner. "This isn't a failing company," he says, spinning in the manner most media CEOs have become quite accustomed to. If you don't believe him, he's got a few more for you: "This is a profitable business." No? How about "The company has a good cash flow. It has a good market position. Online revenues more than doubled in the last year." In other words, filing for bankruptcy protection is, like, the bestest, most awesomest thing ever!

So why, in the face of all this good news, is it happening? That one's easy! Let's take the Internet for 1000, Alex: Creative Loafing (ugh) finds themselves "caught squarely by this challenging economy between old media and new media." If that sounds familiar, that's because a little over a year ago Eason was touting (ugh) Creative Loafing's actions in "pioneering the opportunities offered by convergent print, web, and new media applications." Seems like that didn't work out quite the way he planned, huh?

But the future is bright! Just ask Eason! On an internal memo leaked on Miner's blog, he explains "Bottom line is that once this Company becomes a digital company. The money will follow our transformation." As proof, he touts that last year alone "our online business grew from roughly $200,000 in revenue to a run rate of $1,200,000 currently." That the declining print side of the Chicago Reader alone makes many times that seems to be omitted from the memo, though he does admit that the Reader and the Washington City Pages (originally a Reader property) make up half the profits of the company. Which is all well and good except that it's going to be a hell of a lot easier to become the defacto "going out" website in Sarasota than it is going to be in an oversaturated local web market like Chicago which hosts any number of homegrown alternatives to the Reader's tired website. The Reader stopped being the only game in town decades ago; online it's barely even an also-ran.

But dispite the tough times, Eason is promising no liquidation and no layoffs, and really why not believe the guy? It's not like credit isn't easy to come by right now--the banks are just giving money away, aren't they? Oh wait... What's that? Biggest stock market crash ever? Oops.

Update: As pointed out in the comments, I apparently had Craigslist on the brain when I called (ugh) Creative Loafing's Ben Eason "Craig" accidentally. I've made the change.

blog comments powered by Disqus