When a billionaire owner isn’t enough
By Mathew Ingram
Before COVID-19 brought financial disaster to American media outlets, one of the escape routes some journalists sought was a billionaire buy-out. It seemed to work for the Atlantic magazine. In 2017, when David Bradley, the chairman and former controlling shareholder of Atlantic Media, sold a majority stake to Emerson Collective, an organization run by Laurene Powell Jobs, the company soon embarked on a hiring spree. The Atlantic aimed to bring in about a hundred new employees over the course of a year, representing a thirty percent increase in staff. “It will be a mix of writers and editors and video producers and podcast producers and live events producers,” Bob Cohn, who was president of the Atlantic, told the New York Times. “Those are areas of coverage that we want to focus on, and we’ll do it across all our platforms.” He added that “Emerson is eager to see us grow and succeed, and they were excited at helping to make this happen.”
Now, however, it appears that’s changed. Yesterday, the Atlantic announced that it was cutting sixty-eight jobs, or about seventeen percent of its staff, and instituting a pay freeze for those who remain. Executives are also taking pay cuts. Twenty-two editorial positions were removed, eviscerating the magazine’s entire video team and clobbering the events business, which was meant to provide an alternative to advertising revenue. The coronavirus, as Bradley pointed out in a memo to employees, has effectively nuked events, and no one is quite sure if or when they will return. “We would have paused over furloughs instead of severance if we believed the positions were coming back,” Bradley wrote.
It’s a despairing reality. Anyone who has been following the media industry knows that it was in poor financial shape even before COVID-19. But the Atlantic, which launched a paywall in September, seemed to have been relatively successful. In the past month, it brought in 90,000 new subscribers, and now has a total of 450,000. Editorially, the magazine has provided some of the most valuable coverage of the coronavirus, with writers like Ed Yong making it a must-read. So this leads to an obvious question: if you are doing everything right, subscribers are growing, and you are owned by a billionaire (Powell Jobs is worth about $26 billion at last count), and yet you still lose almost twenty percent of your staff, what chance does anyone else have?
Defenders of Powell Jobs would argue that Emerson Collective is an investment fund, not a charitable organization. It can’t allow itself to burn money. To be sure, Emerson Collective makes acquisitions based on social principles—like the ones that Powell Jobs described when she bought the Atlantic in the first place, praising its mission to “illuminate and defend the American idea.” But these investments are also expected to run as businesses. And if video production and events are collapsing, what rationale is there for keeping on their staff? Even billionaire philanthropists reach a point when the business part of what they’re doing takes precedence.
Yet many observers of the layoffs were understandably frustrated by the outcome. What is the point of being owned by a billionaire if he or she can't cut you a little slack and let you slide through a rough period? Marc Benioff, the billionaire who owns Time magazine, for one, promised that there would be no cuts (even if that guarantee would only last for three months).
To be fair, Powell Jobs’s decision not to give the Atlantic a little more rope isn't the worst billionaire turnaround on an editorial investment—that title would probably go to Joe Ricketts, the billionaire founder of TD Ameritrade, an online brokerage firm. In 2017, Ricketts abruptly shut down DNAinfo, the local news startup he founded, as well as Gothamist, a network of city-focused blogs he acquired just a few months before. According to reports, Ricketts decided to close his publications because he was upset about the fact that editorial employees had organized a union. Remember: if you're dreaming that a billionaire will come and save your publication and ensure that everyone keeps their jobs, you should be careful what you wish for.
Here's more on billionaires and the news:
- Billionaire pique: In a piece for CJR, Alex Pareene looked at Ricketts’s closure of DNAinfo and Gothamist, and billionaires generally losing interest in the media. Describing a throwback to the days of press barons, Pareene wrote, “Not since the 19th century have so many individuals had so much power over the press.” He went on, “An industry that relies on the Joe Rickettses of the world to sustain itself is in deep trouble.”
- Cloudy Quartz: Quartz, a business news site was founded by Atlantic Media, announced a week ago that it was laying off eighty employees, or nearly half of its workforce, with the bulk of the cuts in the advertising department. The site also said it would close its offices in London, San Francisco, Hong Kong, and Washington. Quartz was acquired in 2018 by a Japanese company called Uzabase, a media and business intelligence provider with a market value of close to $1 billion.
- That LA feeling: Earlier this month, the editorial union at the Los Angeles Times—which is owned by Patrick Soon-Shiong, a medical-technology billionaire—agreed to accept a twenty-percent reduction in both pay and hours of work, as a way of avoiding layoffs or furloughs. Journalists at the Times, which signed its first-ever collective agreement last fall, agreed to have their wages and hours cut for twelve weeks starting May 10; management promised not to lay anyone off during that period. The paper’s parent company, California Times, closed three of its weekly community newspapers and laid off fourteen people who produced them.
Other notable stories:
- “Corporations are organisms. They’re like sharks,” a former MSNBC executive told Adam Piore, writing for CJR. “They just move toward the money. That’s all they do. It’s not moral or immoral; it’s amoral.” As Andy Lack, the chairman of NBC News and MSNBC, prepares to exit at the end of this month, Piore looks at MSNBC's journey since its start, in 1996, and what's gone awry.
- In a column for Slate, Ashley Feinberg takes a critical look at the recent New York Times media column by Ben Smith, who suggested that Ronan Farrow played fast and loose with the facts because of a penchant for “resistance journalism.” An examination of Smith’s column “reveals a shakiness in his indictment,” Feinberg writes. “Had Smith taken a more rigorous approach to presenting his findings, he would have undermined his own argument. So instead, Smith chose to perform broad-mindedness, sacrificing accuracy for some vague, centrist perception of fairness.”
- The New York Times has released a diversity report, which says that women now represent fifty-one percent of the staff and forty-nine percent of its leadership; people of color now represent thirty-two percent of the staff and twenty-one percent of its leadership. Each of these numbers increased over last year, according to the Times, with women making up fifty-three percent of new hires in 2019 and people of color making up forty-three percent. But the company still has "gaps in representation at the leadership level, particularly of people of color,” according to the report, and it needs to continue to ensure that “new hires are a diverse group.”
- National newspapers in the United Kingdom no longer have to make their print circulation figures public, according to a decision by the Audit Bureau of Circulations, an industry group run by the country’s major publications that tracks newspaper data. News UK, which publishes the Sun and Times, was one of the first to make its circulation numbers private, so that only advertising agencies that have signed confidentiality agreements will be able to see them. The bureau said the change in reporting “addresses publisher concerns that monthly ABC circulation reports provide a stimulus to write a negative narrative of circulation decline.”
- Apple is in the early stages of developing a series about Gawker, the blogging network that was forced into bankruptcy after a lawsuit by Hulk Hogan, the former wrestler. According to Vanity Fair, the show was conceived and pitched by two former Gawker staffers, Max Read and Cord Jefferson, who have been working on scripts for the past couple of months with a writers room that apparently includes some other Gawker alumni. Read was the editor-in-chief of Gawker at one point, but stepped down in 2015, and later joined New York magazine. Jefferson left Gawker to work in the TV industry, and has credits on shows including Watchmen and Succession.
- Recently, the New York Times decided to stop using third-party advertising services, apparently to protect readers’ privacy. But as Mike Masnick writes for Techdirt, a technology news-analysis site Techdirt that’s not quite right. The Times will still be tracking personal information, “doing the same thing that Facebook and Google have done,” Masnick writes. “It’s collecting data on its users, and then using that data to sell access to advertisers. Why is that evil ‘selling data’ when it comes to those other companies but ‘good’ when it’s the NY Times?”
- The Times Group in India—a media giant that owns forty-five daily newspapers and magazines, including the Times of India and the Economic Times, as well as a number of TV and radio channels and websites—has cut staff salaries and deferred pay raises, according to a report from a media industry site called News Laundry. The Times Group has also laid off “dozens of staffers” at the Economic Times, but hasn't revealed the exact number—and HR managers were being secretive about the cuts.
- Some Good News, the YouTube show created by John Krasinski, who played Jim on the Office, to alleviate the COVID-19 gloom, has been licensed to ViacomCBS. Apparently, there was a “massive bidding war.” Krasinski, who is already under contract with ViacomCBS for a number of movie projects, will no longer host the series, but will be involved as an executive producer.