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Forbes Story - Ambitious Move By Creative Loafing

The following story appeared in Forbes. Click now to view on the Forbes Website.

Louis Hau, 07.24.07, 10:10 PM ET

The recent wave of consolidation in the U.S. alternative press took a somewhat surprising turn Tuesday with the sale of two of the industry's most venerated titles, the Chicago Reader and Washington City Paper, to Creative Loafing of Tampa, Fla.

The terms of the transaction weren't disclosed, although Reader co-founder and President Bob Roth said that the sale price was "an eight-figure number." Roth and fellow Reader co-founders Bob McCamant and Tom Rehwaldt were among the shareholders who also owned City Paper.

The acquisition also includes Cecil Adams' popular syndicated column "The Straight Dope," a longtime Reader fixture.

Creative Loafing is making the purchase with an investment from BIA Digital Partners, a private investment firm in Chantilly, Va.

The deal raises the profile of Creative Loafing, which publishes weeklies of the same name in Atlanta and in the far smaller markets of Tampa, Sarasota and Charlotte, N.C. Those four publications claim a combined average circulation of nearly 275,000, compared to 135,000 for the Reader and 80,000 for City Paper.

Most of the consolidation of once locally owned alternative press outlets has been the handiwork of New Times of Phoenix, Ariz., which took the name of Village Voice Media in 2005 after merging with that company. Village Voice Media is the nation's largest publisher of alternative weeklies, including The Village Voice of New York, LA Weekly, Seattle Weekly and Dallas Observer.

Creative Loafing Chief Executive Ben Eason said the acquisitions of the Reader and City Paper will give his company a presence in three of the top 10 media markets, which he argued will help pitch all of its publications to advertisers, particularly on the Web.

The Reader and City Paper will keep their names and the publishers and top editors of each publication have agreed to stay on, Eason said.

Like mainstream daily newspapers, alternative weeklies are wrestling with the shift of readers and marketers to the Internet. But they haven't been subject to the same cost-cutting pressure as many dailies have, thanks to lower operating costs and the fact that even consolidators like Village Voice Media and Creative Loafing remain privately held and are willing to put up with smaller profit margins than those demanded on Wall Street.

And in terms of editorial content, alternative weeklies have long specialized in areas that the rest of the media has been moving toward, says Roxanne Cooper, director of sales and marketing for the Association of Alternative Newsweeklies in Washington.

"Local is important, opinion's important, [point-of-view] journalism on the Web, in print, on TV is important,'' Cooper said."Our papers have been doing POV narrative journalism for 35, 40, 50 years."

Creative Loafing's acquisition of the Reader and City Paper also solidifies the status of Florida's Tampa Bay area as an unlikely media capital of sorts.

In addition to hosting the corporate offices of Creative Loafing, the region is home to the main offices of famed newspaper designer Mario Garcia, who oversaw the recent redesign of Dow Jones' Wall Street Journal; the St. Petersburg Times, one of the nation's largest independent daily newspapers, and its nonprofit owner the Poynter Institute; the headquarters of the Regional Media Group of the New York Times Co. (nyse: NYT - news - people ); and the corporate offices of software vendor Saxotech, which provides Web publishing platforms for regional newspapers and trade journals published by Gannett (nyse: GCI - news - people ), the New York Times, Crain's Communications and other media companies.

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