Reader Bidder Would Bring Jim O'Shea Back to Chicago Media

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A hearing in bankruptcy court Tuesday in Tampa could decide who winds up controlling the Reader and five other Creative Loafing Inc. papers—the present management or CLI's primary creditor, Atalaya Capital Management of New York. There's not much doubt that Atalaya—owed about $30 million by CLI—has the deeper pockets. But CLI's CEO, Ben Eason, argues that the judge should favor not merely the biggest but the "best" bid, and defer to the incumbents' experience and expertise.

But Atalaya is prepared to argue that Eason doesn't have the corner on those virtues. Managing partner Michael Bogdan has been calling the publishers of the six papers to assure them that Atalaya doesn't mean to take over the papers in order to run them into the ground. And on some of those calls—including the one to Reader associate publisher Steve Timble (Eason is currently acting as the Reader's publisher)—he's been joined on the phone by James O'Shea, who will become a CLI board member if Atalaya wins the auction.

O'Shea is the Tribune managing editor sent west by the Tribune Company in 2006 to take over as editor of the Los Angeles Times. He lasted 14 months, fought with his publisher over the budget, and was fired. In his farewell to his staff he said some things that echoed in his conversation with me today about Atalaya.

O'Shea said in January 2008:

"The formula for success? A small investment in new resources more than pays for itself with added revenues . . .

"One thing I want put on the record . . . is that I disagree completely with the way that this company allocates resources to its newsrooms, not just here but at Tribune newspapers all around the country. That system is at the core of my disagreements with [Times publisher David Hiller]. I think the current system relies too heavily on voodoo economics and not enough on the creativity and resourcefulness of journalists. We journalists have our faults, but we also have a lot to offer. Too often we've been dismissed as budgetary adolescents who can't be trusted to conserve our resources. That is wrong. Journalists and not accountants should seize responsibility for the financial health of our newspapers so journalists can make decisions about the size of our staffs and how much news remains in our papers and Web sites . . .

"We must build on our core strength, which is good, accurate reporting, the backbone of solid journalism, the public service that helps people make the right decisions about their increasingly complex lives."

O'Shea told me that if Atalaya wins the auction it will put in place as interim CEO Richard Gilbert, a former president of the Des Moines Register. O'Shea has known him for years, and when Gilbert asked if he'd join a reconstituted CLI board, O'Shea said yes. "I checked out Atalaya," he told me. "They seem like people serious about reinvesting in journalism. They know there's no value in this company cutting back — that's already happened. From my perspective they're looking at this very intelligently — they believe in investing in the industry. You can't keep taking things away from your readers and expect them to keep reading."

Under Atalaya, control of CLI would shift to a four-person board—"people with some ties to Chicago," said O'Shea, who expects to have "a more active role" in the company than directors usually have. "They're looking at me as an editorial resource."

Before hanging up, O'Shea told me, "Hopefully you'll get some clarity tomorrow," but he wasn't promising it. As he said, Judge Caryl Delano could tell Eason to keep the company, give it to Atalaya, or announce she needs more time to think. Judges like to get these things right.

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