Problems mounting for SoVo, David owner

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There’s more bad news for Southern Voice and David Atlanta, publications already stymied by a crashing advertising market and federal receivership.

Gay blog Queerty details that David Unger, the force behind the majority owner of the local gay pubs, is now being pursued by agents with the U.S. Department of Labor while the Small Business Administration has stopped its investment in the company. That’s in addition to complaints from staffers and freelancers across the company about not being paid and resignations from high-level executives.

Unger is reportedly being looked at by the U.S. Department of Labor, according to a source on the inside, who tells us an agent was at Window’s offices on Friday looking for Unger, who wasn’t there because he “works from his home now.” The agent “wandered around with a notebook and talked to a few people.”

At least some staffers on salary at Window and Genre haven’t been paid “for weeks,” we’re also told.

And what about all the freelancers who claim they haven’t been paid by Window Media for the past year? On Friday an attorney representing “a huge band of former freelancers” supposedly “served … papers” to Unger and Avalon. (We have yet to see any record of an actual lawsuit, and court papers are often “served” by court officers or law enforcement, not opposing council.)

Meanwhile, says our source, the Small Business Association, which sank $38 million in loans into Avalon, has “discontinued their investment in Window” as of last week. (We haven’t confirmed this.) But if that’s true, it would leave Avalon very strapped for cash: Already its coffers were nearly empty, and without SBA’s funds, there’s no liquidity. Not helping is the dwindling advertising revenues from the Blade newspapers, Genre (which, we’ve often heard rumors of, gives away full pages in exchange for favors to top execs), and magazines like 411 and David (where ad policies are even looser). Window, we’re told, even issued a memo about “changing the payroll date” after “missing payroll for salaried employees for a third cycle.”

A brief recap: The New York-based investment company that owns a majority stake in the publishers of SoVo and David is in federal receivership — a form of bankruptcy — and being sued by the Small Business Administration. The SBA may sell the media properties as its dissolves the assets of Avalon in the coming months (or years). It’s not really clear as officials from Avalon and Window Media aren’t commenting to media outlets.

The problems escalate an already difficult time for the local publications and provide additional distractions just as David launched a redesign of the magazine amid new competition. SoVo continues its aggressive coverage of local gay issues as best it can, but faces a shrinking editorial staff and resources. Atlanta freelancers for both publications are seeing lengthy delays in getting paid.

SoVo’s page count has dropped to 24 pages in recent weeks, an historic low for the paper. Though David was 120 pages for its Feb. 26 relaunch, it dipped to 64 pages a week later. Page count is dictated by advertising, so lower page counts indicate a drop in advertising. Less advertising, of course, means less revenue to pay operating expenses. And fewer pages in the publications mean less editorial coverage for readers.

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