UPDATE 1535: Creative Loafing chain sold to biggest creditor for $5 million (Atlanta Journal-Constitution)
UPDATE 1459: Washington City Paper Now Owned by Atalaya Capital (DCist)
Atalaya outbids Eason, assumes control of Creative Loafing (Creative Loafing Tampa)
UPDATE 1332: Hedge Fund Atalaya buys Creative Loafing in equity auction (Tampa Bay Business Journal)

UPDATE 1256: New York equity firm snaps up Tampa's Creative Loafing (Tampa Tribune/TBO.com)

UPDATE 1240:Chicago Reader Has New Owners (Chicago Reader)

UPDATE 1236:Tampa's Creative Loafing chain taken over by hedge fund Atalaya (St. Petersburg Times/tampabay.com)

UPDATE 1229: Atlanta Creative Loafing says Atalaya won.

UPDATE 1223: Chicago Reader calls it for Atalaya.

UPDATE 1218: Unconfirmed Twitter chatter is that Atalaya has won.

In Tampa, Fla., Judge Caryl Delano has begun the process of deciding who will own Creative Loafing, the newspaper chain that purchased Washington City Paper and the Chicago Reader in July 2007 and filed for Chapter 11 bankruptcy 14 months later. Creative Loafing CEO Ben Eason is bidding for the company, as is Atalaya Capital Management, which loaned Eason $30 million toward the original purchase.

Here are some links to current stories about the proceedings; I'll update them as new information becomes available.

Creative Loafing Auction Goes to Judge Today (Editor & Publisher)

Creative Loafing equity auction is underway (Creative Loafing Atlanta)

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

Creative Loafing's publisher may lose chain of weeklies today (Tampa Tribune/TBO.com)

Will Creative Loafing's fate be decided today? (tampabay.com)

Battle to control Creative Loafing is heating up (Creative Loafing Atlanta)

For the second year in a row, contributor Jeffry Cudlin won the arts criticism category for his work, which this year included the following: "Pine of the Times" about the Martin Puryear retrospective at the National Gallery of Art, "Sheet Smart" about the Christo and Jeanne-Claude exhibit at the Phillips Collection, and "Pain by Numbers," a wrap-up of what D.C. museums did and didn't offer in 2008.

Editor Erik Wemple won first place for media reporting/criticism with his cover story "One Mission, Two Newsrooms" about the Washington Post's struggle to bridge the cultural and geographic divide between its print and online operations.

In the elusive "innovation/format buster" category, the cover story some loved and others hated---"Washington City Paper Files for Chapter 86 Content Bankruptcy"--- also took home first-place honors. The piece by Wemple, Managing Editor Andrew Beaujon, and Asst. Managing Editor Jule Banville was written and presented in the form of a legal document spoofing both the changing nature of City Paper's journalism and and the Chapter 11 bankruptcy filing by our paper's owners, Creative Loafing.

Creative Loafing's Atlanta paper received second-place honors in the feature category for the first-person account, "Sober," by Thomas Wheatley. The Chicago Reader, also our sister paper, received two second-place awards. Ann Ford was so honored in the arts feature category for "Life Without a Script" and columnist Ben Jarovsky's "The Works" was named in the column (political) category

The AAN Awards are open to its 130 member papers. Most of the altweeklies in U.S. cities (plus a few in Canada) enter the contest each year. This year, the top all-time AAN Award winner, the L.A. Weekly, led the pack with four first-place awards. In the 14-year history of the awards, Washington City Paper has won the second-most overall awards in the top-circulation categories: 51.

Last year Craigslist, which lists 18 employees on its "about us" page, made somewhere between $20 and $80 million dollars. So why is its CEO, Jim Buckmaster, so p.o.'d about sex ads in alt-weeklies?

Because these bottom-feeding free publications are making an erotic comeback in the classifieds biz, with an assist from law enforcement.

Buckmaster has even taken to the blogosphere to air his frustrations with alt-weekly encroachment. In a recent post, he lists several titles of adult ads he found on backpage.com, a collection of classifieds sites owned by Village Voice Media (VVM). "Cum lay your hotdog on my bun for memorial day" (Dallas); "Let me put you to bed backdoor available $80" (Columbia, S.C.); "An Irish blowjob and a cum showering rainbow" (New York). He links to a screenshot of the last ad, which has photos of a woman performing fellatio.

"It’s worth noting that these ads’ TITLES ALONE contain more explicit content than you will find in all craigslist adult service ads combined," he writes in the post.

This umbrage is a bit rich for many alt-weeklies, for whom Craigslist's free classifieds were an extinction-level event.

Kris Dodd, a longtime classfied-ads sales representative at the Chicago Reader (which, like this paper, has been owned by Creative Loafing since 2007), remembers days when his paper ran 50 pages of classified ads---and not on the paper's puny new size; we're talking glorious 11x17 quarterfold. "You could buy a Lamborghini a week for what we made in classifieds," he says, taking pains to note that Lamborghinis command a wide range of prices.

Brett Murphy, the Reader's advertising director, says pre-Craigslist (the meteor hit around 2005), the paper ran about 5,000 classifieds a week. Last week it ran about 1,500 in the paper and about twice that online. But the days when alt-weeklies essentially printed money, when, as Dodd says, "we were legendary," are long gone.

But at some weeklies, something unexpected is happening. Here at Washington City Paper, where few ad categories in recent memory have been the stuff of legend, adult ads in the first week of May were up 38 percent over the same time last year, says Heather McAndrews, the company's classifieds manager. Mark Bartel, the publisher of Minneapolis' City Pages, says adult ads there have "almost doubled." SF Weekly ran 160 adult ads the week before Craigslist's new standards dropped; last week, it had 910. (Both City Pages and SF Weekly are owned by VVM and power their classifieds with backpage.com.)

In the glory days of alt-weeklies, the money in classifieds came mostly from real estate. The Reader's classifieds are such an ingrained part of Chicago life that This American Life just ran a show whose stories bounce off Reader classifieds. But "adult-services" ads---wink-wink, nudge-nudge solicitations for escorts and "sensual bodywork"---lent a, um, helping hand. Craigslist laid waste to that business, too: An adult-services ad in Washington City Paper starts at $150 per week. At the Reader, an online/print combo runs $100. On Craigslist it was, until May 12, $5, money the Web site donated to charity.

But murders have a way of upending business models.

On April 14, Julissa Brisman was murdered in Boston; her killer had allegedly found her through a massage ad in the "erotic services" section on Craigslist. George Weber, a New York City radio reporter, was murdered a few weeks earlier, allegedly by someone who'd answered his Craigslist ad seeking rough sex.

Never mind that both accused killers answered rather than placed ads, or that Craigslist helped finger them; Richard Blumenthal, Connecticut's attorney general, called Craigslist "a blatant Internet brothel." Other attorneys general chimed in. Craigslist beat a strategic retreat, closing its erotic services category and promising to manually review all ads in the new "adult services" one.

And thus a famously, painfully level playing field was made a little less level. Now, when you place an adult-services ad on Craigslist, you have to aver that you are offering no "content that is unlawful, pornographic, or which advertises illegal services"; no ads "suggesting or implying an exchange of sexual favors for money"; no "pornographic images, or images suggestive of an offer of sexual favors."

That complying ad will run you $10, because manually vetting ads is not cheap.

With Craigslist selling ads in more than 250 markets, searching for noncompliant ads means looking for the obvious: codes like a half-hour of someone's company will cost you 100 "roses."

Craigslist's "competition" has standards, too---they're just not as fresh and unequivocal as the ass-covering Craigslist versions. In a City Paper ad, says McAndrews, you can't post a photo of genitalia or penetration. "Nipples are kind of on a fence," she says. Heather Hansen of the Seattle Stranger says advertisers on its Naughty Northwest site can't "show their privates," adding that photos can be "a little bit risqué and sexy but nothing over the top."

"Kay," who advertises herself as a "Busty Blonde/ Toys" in City Paper, says Craigslist's new standards mean she can only submit "one of my pictures that doesn't net me a lot of business." Another woman who advertises in both City Paper and Craigslist and spoke on the condition that I didn't print her name says Craigslist's "standard is no good because you cannot really describe who you are."

At backpage.com, the standards are far more media-shitstorm-proof. Backpage charges Craigslist-like prices structure for its "adult entertainment" ads---in Minneapolis, for example, body rub ads cost $3, phone and Web site ads are a buck, and female escort postings cost $5. A variety of add-ons are available, and the site likewise warns against soliciting for illegal acts or using "code words such as 'greek', 'bbbj', 'blow', 'trips to greece', etc."

In an e-mail, Buckmaster says that "Village Voice staff quickly removed" the ads he linked to in his post, "but the titles alone tell the story." He included a link to the fellatio screenshot, saying it "illustrates the standards for content prevailing" at backpage.com.

After Buckmaster zinged backpage.com, it fired back, listing some ads it found on Craigslist. "I don't understand why he would attack us when really Jim Buckmaster understands the word 'Whac-a-Mole,'" says Carl Ferrer, backpage's founder and a vice president at VVM. "He still has lewd photos and coded terminology. He's still got it. They're in personals and casual encounters. And I'm not beating him up for it; just Buckmaster and I are aware of the challenges of user-generated content."

Ferrer says backpage "did get a real spike in traffic with Craigslist's changes," but he cautions that spikes in traffic may be illusory: "Many users were black hats," he says. "Users from China posting porn. Users using stolen credit cards." Backpage, he says, has hired extra personnel to work in its abuse department.

"Craigslist has spent 14 years building its business based in large part on page views from adult content," Ferrer says. "And now that their market share is secure, it's decided to modify their rules of content and demand that everyone's done the same as they've done."

But now all of a sudden, Craigslist is at a great disadvantage to free weeklies, many of which aren't on the scopes of pontificating state pols. (And if this turnaround ends up saving my paper, I say God bless the unfairness of it all.) The Reader's Dodd, who says his paper hasn't seen anywhere near the increase in adult ads that City Paper or others have, calls the situation a "fluke."

"It'll just blow over," he says. "Most of this is a reaction to attorneys general and various sheriffs. But anybody who advertises on Craigslist, they could run the same ad in the Reader anyway."