Chicago Reader parent seeks bankruptcy
Creative Loafing Inc., owner of six weekly U.S. newspapers including Washington City Paper and the Chicago Reader, sought bankruptcy protection after advertising revenue shrank for its print editions.
The closely held company listed both debt and assets of $10 million to $50 million each in Chapter 11 documents filed today in U.S. Bankruptcy Court in Tampa, Florida, where it's based. Creative Loafing acquired the Washington and Chicago weeklies in July 2007.
"The debtors have not suffered from the readership declines experienced by daily newspapers," Creative Loafing said in court papers. The company was "significantly affected by the advertising trends that are shifting from traditional media to digital strategies."
U.S. advertising spending plunged 3.7 percent in the second quarter, the most in seven years, as a slowdown in consumer spending prompted companies to cut marketing budgets, New York- based market researcher TNS Media Intelligence said Sept. 24. Spending at local newspapers dropped 9.2 percent while spending rose 7.6 percent on Internet display ads.
Creative Loafing and its affiliates publish six "alternative" newspapers with a weekly circulation of about 425,000 and produce the Web site "Straight Dope," which draws more than 1 million viewers, according to court papers. The company's other newspapers are in Atlanta, Charlotte, North Carolina and Tampa and Sarasota, Florida.
During the reorganization, Creative Loafing said it will try to accelerate plans to deliver more news and information over the Internet and to devices such as personal digital assistants, instead of mainly print.
"Due to the current state of the economy and technology changes, the debtors are attempting to quickly more fully develop and implement the digital and `bundled' print and Web and mobile-based products," Creative Loafing said.
Benjamin Eason founded Creative Loafing in 2000, combining the Creative Loafing newspaper his parents started in Atlanta in the 1970s with the Weekly Planet in Tampa, which he began in 1994, according to court papers.
Eason didn't immediately respond to an e-mail seeking comment.
Affiliates Weekly Planet, Weekly Planet of Sarasota, Creative Loafing Atlanta, Washington Free Weekly, CL Birmingham, CL Charlotte, CL Chicago and CL Washington also sought protection.
The case is In re Creative Loafing Inc., 08-14939, U.S. Bankruptcy Court, Middle District of Florida (Tampa).