Alt-weeklies in Atlanta, Chicago, D.C. to be sold, but first pay cuts
Employees at Washington City Paper, Chicago Reader, and Creative Loafing Atlanta were told at meetings today they'd be getting an across-the-board 5 percent pay cut with their next paycheck. There have been layoffs at the Atlanta paper and there will be "job restructuring" elsewhere. This all comes as the papers prepare to look for new owners.
At a meeting this afternoon, Washington City Paper publisher Amy Austin she is looking for a new owner, preferably local, for the 31-year-old paper.
In Atlanta, four staffers lost their jobs: special projects director Chanté LaGon, food critic Besha Rodell, staff writer Scott Henry and critic Curt Holman. City Paper's
Reached by telephone, group publisher Alison Draper says the cost reductions and the plans to sell the paper are "parallel initiatives" and not intended to sweeten the papers for potential buyers.
"These plans were well in play long before the news broke in Chicago this week," Draper says, referring to a Crain's Chicago Business report Monday that the Reader was for sale.
The publishers of each paper, she says, are working with Bulkley Capital in their respective cities to "facilitate conversations with prospects that we feel would make for a strong owner."
Draper says she's "very encouraged" by the interest in the papers that's surfaced since the Crain's report. "It’s been a challenging week," she says, "but the activity that came as a result of the Crain's piece actually turned out to be a real game-changer in terms of surfacing some people that we were pleasantly surprised by." She says "we've had increased activity in Atlanta as well as in D.C.," as well.
Atalaya Capital Management, a hedge fund, owns the three papers. City Paper and the Reader were sold in 2007 to Creative Loafing, a chain of alt-weeklies then based in Tampa. Creative Loafing declared bankruptcy in 2008 and its owner, Ben Eason, was ousted by Atalaya in August 2009. The hedge fund sold Creative Loafing's Tampa and Charlotte papers to SouthComm last year.
I was managing editor of Washington City Paper from Jan. 2006 to May 2010.
Draper and company CFO Tammy Bailey sent out the following memo to staff after the meetings:
Today’s news of company-wide wage reductions, job restructuring and job eliminations, combined with Monday’s report of increased activity from potential buyers of the Chicago Reader, makes for a difficult week for our organization. The expressions of serious interest from potential suitors bring to light the tremendous opportunities on the horizon.
We must do what so many news media organizations around the country have done: realign our organizations and ourselves to face the new and rapidly changing media landscape.
The job eliminations and wage reductions are a necessary action to put each of our properties on solid financial footing, allowing us to protect our organization against uncertainty—and therefore continue the important work we do.
Our papers and websites are of great value and importance to our cities. It is important that we continue providing the same high quality publications and services to our readers and advertisers, and having the proper operating and expense plan is imperative. Regardless of who the shareholders are, we need to be nimble and concentrate on sustainable growth initiatives.
As you all know, as covered in the Chicago press, the properties have had an increased number of inquiries from potential suitors. Our owners have expressed interest in exploring those opportunities. We believe this provides an opportunity for our properties to align with a new owner who understands the legacy of our brands, respects the impact they have in our cities, and has the infrastructure and vision to help bolster our unique local reach in the rapidly evolving digital media environment. We have been working very closely with Atalaya and Bulkley to ensure this is possible.
As we undertake this process, we all must stay focused on continuing to execute our strategies for increasing audience and revenues. We know this is not easy for any of us, however we are more committed than ever to produce great content for our beloved cities. Your hard work and dedication as we strive to achieve the best outcome for Washington City Paper, Creative Loafing Atlanta and the Chicago Reader are integral not just to our near-term goals, but to the kind of future we want for these iconic publications and for ourselves.
Alison & Tammy
Correction: An earlier version of this post incorrectly reported that there would be layoffs at the Chicago Reader.