This week the sale of Kotaku to Keleops, the buyers of Gizmodo, was announced.  Coming on the heels of Redbrick, a Canadian company, buying both Quartz as well as The Inventory, this leaves G/O Media with just The Root.  And while The Root is a wonderful site and a very good business it is now abundantly clear that G/O Media is and has been working towards a full wind down.

Given that our company’s future is now abundantly clear I thought I would take a moment to review why we chose this route and how it has gone, as well as reflect a bit on the 6-year run that G/O Media has been on with a thought or two on where our industry is currently sitting.

The “why” here is very straightforward.  G/O Media is predominantly owned by a Growth Equity firm named Great Hill Partners.  Given how both private equity and growth equity work it became clear to our investors that it was time to move on.  While the business in general was doing as well or better than the vast majority of its peers it was clear that the hockey stick type growth that was initially planned before Covid and several media recessions and the ongoing issues of the walled gardens (Google, Meta, etc.) was not coming in the near future.  This combined with the aforementioned 6 years of ownership suggested that the time was right for GHP to move along.

This is in no way a suggestion that Great Hill was in some way acting like a rapacious private equity firm.  As the primary partner and chief operator with them in this business I can say with a clear conscience that GHP has been a very good partner.  They have supported the company through the pandemic and through a series of widely wrong and disingenuous accusations from our Unions.  They have never weighed in on editorial direction and they have been stalwart in support of the company mission to serve first and foremost, the daily visitors to our sites.

In short, given their business model and frankly my own plans, the time had come.  Now that said, they neither pushed nor did we work to sell at any price simply to exit the business.  We worked through a rather difficult time in the digital content space to get the best outcomes that we possibly could for both the shareholders as well as the employees. 

Of course, it would have been a much easier process to sell the company as one combined entity but that proved difficult given the current climate.  Instead, we have worked hard to find the best possible homes for each of our brands.  A quest we are still on with The Root, a truly powerful and important voice in Black America.

The outcomes?  We can state that, even before completing all of the transactions, we will exit having increased shareholder value.  A feat that few other companies in our space can claim.  Just look at the issues surrounding companies like Vice, BuzzFeed, BusinessInsider and Vox to name only a few.  All very good or even great companies that have experienced real pain in the recent and current economic climate and all of whom have seen real shareholder value erosion and employee downsizing.

And important in our actions, we have treated our colleagues with respect and have honored our financial commitments to all of them.  In fact, over 70% of our editorial colleagues were offered jobs after the divestitures.  I suspect that is a number that rivals other media companies that have not gone through strategic divestitures.

I won’t re-litigate each of our divestitures but I will say that this has been an era of extreme upheaval and complexity for editorially driven companies driven in part by the increasing market dominance of the walled gardens, the parasitical nature of the AdTech eco-system and the intense cultural wars that the unionization of these companies has brought.

In a number of ways Unions have added value to editorial employees’ positions during a time of major change.  But in many more ways the core methods that Unions work with (or rather against) companies working hard to change with the times is counterproductive to both their membership as well as the companies as a whole.  It feels a bit like some of these extremely combative positions are a bit on the wane now.  But perhaps that is just our specific case as our Union base has gotten dramatically smaller.  Or, hopefully, it is an indication that the Unions themselves are realizing that what works in one industry (say automotive manufacturing or mining) does not work in other industries.  To suggest that there is a fundamental difference between knowledge workers vs. miners or assembly line workers is overtly basic.  There are more nuanced issues here…but that said this would not be a bad place to start.

In short, I hope for a future that has Unions in our industry but Unions that are much more focused on what our industry does and what constitutes success for editorial peers and does not try to litigate with a one size fits all approach.  At a basic level, having a more reasoned and civil dialogue between management and Union leadership would be a very good place to start.  The two groups in this discussion are clearly connected at the hip around core success metrics.  Great editorial work drives great engagement, and great engagement is the core engine of success for any editorially driven business.  Too often the knee jerk Union response to layoffs is that management has somehow failed the editorial team.  In some cases that might true, in others it might be a shared culpability and still others it could simply be that the content that is the very essence of the value proposition of the business was not in sync with the people coming to the site(s) every day.  The point is, as I said above, edit is too core to content businesses not to be both instrumental and accountable for both success or failure.  Dialogue between Union and management should respect that relationship, work to make it better and accept shared accountability.

But this also highlights one of the biggest challenges in this discussion.  What, in fact, does successful engagement look like.  In some ways this is an impossible question to answer.  Buzzy, insightful, muck raking articles are clearly important elements of pushing editorial brands to greater and greater levels of industry recognition and respect.  But there are times when this type of content does not drive the most visitor interaction.  There needs to be an appropriate balance between these two goals, editorial impact and respect, as well as reader affinity.  At one and the same time the two are clearly linked and yet can also be goals at cross purposes.  And within this wrestling match comes a recently elevated issue of the writer as activist.  Often now, the writer wants to choose topics and story angles to match their own specific world view.  A practice that often actually works against the very brand building that some would suggest supports such practices.  All editorial coverage comes with some level of writer bias but the basic first day story should be as fact based as possible and when the writer does add personal views later in the timeline, that reporting or opinion should be clearly labeled for the reader.  All too often we stray from these core practices, and this is as true today in legacy brands as it is in digitally native brands.  We certainly saw this up close and personal in the early days at G/O Media when at times there were even arguments about what the core mission of the sites were and who was responsible for defining and supporting those missions.

A poster child here might be Deadspin and the early issues we had with the incumbent staff.  Who owned the site and who had to make the site work was theoretically not a core factor in what the site reported on nor how it did that reporting.  We asked for the slightest of changes, to cover just sports, sports related issues as well as sports adjacent stories.  That was perceived as beyond the pale by the legacy team and as such they left en masse.  An outcome that the management team certainly did not want.  But that said, with a new team which was also feisty to say the least (just ask our IP lawyers) but who stayed within the sports realm, we returned the site to previous traffic levels and made a profit for the first time in many, many years.  And, in the end, we sold the site for more than we bought it for.

These have been an eventful 6 years for G/O Media and the industry as a whole to say the least.  Despite having spent over 40 years in this industry (and specifically in digital for the last 20+) and having run many diverse and different newsrooms since the mid-1990s, I have to say that I have learned a lot.  Been surprised by more things than I expected and grown as a person and a manager.  May you live in interesting times goes the proverb, and I have.  But having said that, it seems clear to me that we are by no means looking at calmer waters in front of us.  Hopefully better waters with more respect and financial support for content and the people and companies that create it, but in no way do I see the velocity of change abating at all.

Some of this current and coming change is obvious but not totally understood.  AI is a prime example.  It is here to a degree but there are so many more shoes to drop.  How will AI affect content creation?  What will it mean for business operations?  What more might it do around content discovery?  Will AI “clean up the supply chain issues” that are currently so stubbornly bad?  Clearly this technology is already having a profound impact.  But so much more is yet to come, both good and perhaps bad depending on where you sit and how well monitored and controlled it is.  But one thing to keep in mind, consumers seek out content for many reasons.  Certainly, for specific knowledge, which search and search like models satisfy in very effective ways.  But also, for insights, enjoyment, entertainment and inspiration.  Search and now AI will not satisfy those needs in any real way in the near future.  This does not mean that the current structure of the web and how traffic is built will stay the same.  This is an area that is clearly changing quickly and with often very negative impact on the current business models for content driven companies.  But that does not mean that the need is not still there and with that need, the opportunity to build very successful business models.

AdTech is another area where we have seen and continue to see major change.  For the most part this end of the ecosystem has been a parasitic drag on the entire industry.  Google and the other walled gardens are key players here, but they are not alone.  There are a series of core beliefs that AdTech works on that are mostly either not true and never have been or are not realized yet.  The value of specific audience targeting separate from the context might lead this list, but fundamental building blocks of AdTech like signal source and value are without question key players in a system that fundamentally hurts content producers and marketers alike.

Perhaps the recent success of governments around the world in their efforts to curb “big tech”, build consumer privacy and make the whole supply chain more transparent will start to bear fruit.  Simply moving ad serving out from an enterprise that is also providing core demand would certainly help.

There are many more ways our business is changing and will continue to do so.  That has always been the case and always will be.  The velocity of change continues to accelerate but that has been a core part of this trend for eons.  This only means that business in general and digital business in particular will need to depend on innovation more and more.

I am proud to say that we at G/O Media worked hard at innovating, at trying new things.  We were often ridiculed for it but we are always better for it, regardless if those attempts succeeded or not.  We worked hard at finding new ways to target our audiences by using real signals and not third-party nonsense.  We guaranteed results and showed how campaigns on our sites worked to achieve partner’s goals as well or better than other options.  We improved our core platform and made our sites faster and more user-friendly.  We experimented with AI in almost every facet of our business from content support to aggregation-automation to ad serving to audience science.  We worked to make all facets of the company transparently accountable.

In most cases we found success, in some we failed, but we learned.  Innovation was always a constant, which was clearly a key reason for our survival and growth during these very trying times.

But even more core to innovation was in finding and nurturing a team that was open (in most cases) to trying new things, learning from the misses and doubling down on the wins.

So here is to our complete team from editors to sellers to developers to marketers and everyone in-between for a remarkable and successful run with G/O Media and the sites and people that made up the company.  And here is to wishing everyone in the industry a better tomorrow.  Change will continue and the future is fuzzy at best, but at the end of the day, consumers will still want what they have always wanted and therein lies a great deal of support for a future driven in in great part by digital content.

– Jim Spanfeller