Window Media Newspapers, Magazines Shut Down

by Steve Weinstein

EDGE Media Network Contributor

Monday November 16, 2009

In a stunning development for gay media, Window Media has suddenly shut its doors. Window published the Washington Blade, one of the most respected local gay newspapers in the country, as well as the Southern Voice (Atlanta), the South Florida Blade, and going-out magazines David Atlanta and 411 (Southeast Florida).

The news was first reported on Project Atlanta, a local gay news blog serving the Georgia capital city. "The publishers of Southern Voice and David Atlanta magazine--along with a handful of other gay publications--abruptly closed its doors over the weekend, ending a months-long battle with a federal receivership that has imperiled the gay media company," the blog reported.

"A three-sentence notice was posted to the front door of the Window Media office in Atlanta before employees arrived Monday morning." The blog reprinted the posted notice, along with a photo of the notice on the office. door.

It read thusly: "It is with GREAT [sic, & below] regret that we must inform you that effective immediately, the operations of Window Media, LLC and Unite Media, LLC have closed down. Please return to this office on WEDNESDAY, November 18th, 2009 at 11:00 AM to collect personal belongings and to receive information on your separation stipulations. Please bring boxes and/or containers that will allow you to collect all your personal belongings at one time."

The notice was signed by COO Steve Myers and CFO Mike Kitchens. The two men have been effectivelly running the organization since founder David Unger left the organization in July. Unger is now working as the managing director of corporate finance at Knight Libertas, a Wall Street investment firm.

The company has had a string of problems linked to the general crisis of print publications in general and local newspapers in particular over the past few years. The startling speed with which the Web has replaced print was compounded by the recession, which has hit the real estate and automobile industries particularly hard.

Both ad categories were mainstays of local newspapers, including the Window properties. The Washington Blade, for example, used to have a thriving real estate pullout. Much of the information from the bar guides has also migrated to the Web.

But the problems with Window Media had deeper roots than just the ones common to all such publications. Born of an attempt to amass a nationwide chain of local publications, Window Media was originally the product of three people: lawyer-turned-journalist Chris Crain; William Waybourn, the former head of GLAAD; and entrepreneur David Unger.

Each brought something to the table. Crain had editorial expertise and became executive of the growing chain. Waybourn had the contacts in the LGBT community and became group publisher. And Unger, who had made a fortune as one of the original investors in the then-nascent local cable-TV industry, had the bucks.

Unger's company, Avalon Equity Properties, was a separate entity from Window. The two were separated in part to protect each from the other. Although there was always a synergy between the two (some functions were run out of Avalon's suite of offices on Third Avenue in Midtown Manhattan), the distinction became important when Window began failing.

Window was effectively run out Washington, D.C., where the chain's flagship, the Washington Blade, was located. But Kitchens and Myers, who came aboard when Window acquired the Southern Voice, were based in Atlanta. And much of the advertising sales drifted to New York, as did much of the executive functions as Unger took over more of the daily running of the company.

Unger, Crain and Waybourn went on a buying spree. They took over the Houston Voice and the New York Blade. Unger also bought national gay men's lifestyle magazine Genre, David and 411, as well as the New York Press, an alternative weekly.

But there were problems from the beginning. The New York Blade had trouble finding traction in a city that has not been hospitable to a gay newspaper. Gay City News stands as the only such paper, but before it, where was a string of also-rans. The New York Blade ended up being sold to then-HX publisher Matthew Banks, although Unger held a minority stake in the entity.

The New York Blade has since shut its doors as has HX. The New York Press was sold to a local neighborhood weekly publisher after losing money for years. It was always a scrappy second to the category leader in the market, the Village Voice, and is still being published.

The Houston Voice was shut down not too long after Window bought it, as was a weekly in New Orleans. Genre, which had been published by founder Richard Settles out of Los Angeles, was brought to New York. But it never gained traction from the category leader, Out magazine, and was shut down.

Meanwhile, the dream of a national chain of local gay newspapers was slowly coming apart. Publishers of successful established papers like the Windy City Times in Chicago and Philadelphia Gay News refused to come to terms. Add to that the general implosion of print advertising and a perfect storm was brewing for Window Media. Unger eventually forced Waybourn out, and then Crain.

Window had the additional burden of a loan from the Small Business Administration. When it became apparent that Window would not be meeting the SBA's lending requirements because of continued turmoil, the SBA moved in and Unger left the company. The chain has been under federal receivership since August 2008 and had reportedly borrowed $38 million.

According to several sources, Window has been shopping its publications around, but in this market, it's difficult to find buyers for print properties. The federal receivership meant dealing with payback to a federal agency as well. The debt burden may have proved so onerous that servicing it made a profit nigh-impossible.

Todd Evans, who heads Rivendell Media, bluntly told the Atlanta Constitution-Journal he was only surprised Window Media lasted this long. "I'm surprised it didn't happen sooner," he told the paper. "Window Media has been through this process of gobbling up and buying everybody. Now the chickens have come home to roost."

Rivendell is the major ad-placement agency for gay print media in the United States. It does a large business in categories that have become staples for gay publications such as premium liquors and HIV pharmaceuticals.

David Unger, however, puts the blame squarely on national advertisers. In an interview with EDGE, Unger called the strategy of assembling a national gay media network "brilliant. Everybody did their job. It was the homophobic national advertisers. If you're going to blame anybody, blame it on Target and WalMart, and Proctor and Gamble, and Ford and Coca-Cola, because they're the ones who should be advertising nine years later," he said, referring to the founding of Window in 2001.

Unger also complained about "maligning" in much of the gay press of himself and others involved in Window's management: "You wouldn't believe how much of my net worth I put into that company."

He also compared the prices Window paid for publications like Genre and the New York Blade to what media barons like Sam Szell, who took over the Tribune papers, or the Dolan Family, which bought New York Newsday, paid. "I didn't overpay!" Unger asserted. "If national accounts had grown by even 5 percent, we would have been rolling in it."

Bill Kapfer, the former co-president of Window Media, gave EDGE the following statement on the shutdown. Kapfer comments on the problems besieging print media:

"I was disappointed to hear the recent news of Window Media/Unite Media closing its doors. The Washington Blade, Southern Voice and South Florida Blade were respected brands in the publishing world---megaphones in the LGBT community. As the industry struggles in a radically changing media environment during the worst recession since the Great Depression, I can only hope that there are no more voices being silenced. With more than 100 newspapers closing this year alone, it's no surprise that papers in the LGBT space have been equally impacted. My heart goes out to all my former colleagues and their families as they turn the page and greet the next chapter of their lives."

As of this morning, the papers were shut down. None of the websites are operational.

Laura Douglas-Brown, who began at the Southern Voice as a reporter and worked her way up to editor, sent out the following message on her Facebook account:

"With deepest regret, as editor of SoVo, I have to tell you that we arrived at the office to learn that our parent company, Window Media, has shut down. While the 20 years of SoVo have come to an end, our civil rights movement is only beginning. I am personally grateful to all of the staff, and to all of you who have had the courage to share your stories. It has been the honor of my life to help you tell them."

Brian Moylan, a Gawker editor who had worked at the Washington Blade for several years, reported that employees of the Southern Voice were huddled in the parking lot of the office building after the disclosure.

Even with all of their problems, it is difficult to believe someone won't step to the plate, at least to cherry-pick the still-viable publications in their respective markets. Meanwhile, the reading public will miss newspapers and magazines that were lively and informative.

The Washington Blade is the oldest local gay newspaper in the country and had just celebrated its 40th birthday. Editor Kevin Naff did tell Politico's Michael Calderone, "The Blade staff is united and ready to continue the paper's long-standing mission. The first meeting for our new venture is Tuesday and we welcome the community's input as we move forward."

Full Disclosure: I served as the editor of the New York Blade from 2002 until 2005, when I became publisher of the New York Press, for which I also served as interim editor for a few months. I also contributed to a blog for Window Media for half a year.

Steve Weinstein has been a regular correspondent for the International Herald Tribune, the Advocate, the Village Voice and Out. He has been covering the AIDS crisis since the early '80s, when he began his career. He is the author of "The Q Guide to Fire Island" (Alyson, 2007).