Exclusive: G/O Media has no plans to sell in 2024, CEO says
G/O, formerly Gizmodo Media Group, has no plans to sell its whole portfolio this year, CEO Jim Spanfeller told Axios in an interview, despite a rough past year for G/O and media in general.
What they're saying: "We're not strapped for cash," Spanfeller said when asked whether the firm plans to raise money if it doesn't sell. But if there was an opportunity to bring in a different financial partner "in a way that helps and benefits" G/O Media's parent company, "that's possible," he said.
The big picture: G/O Media, which was acquired by private equity firm Great Hill Partners in 2019, was not profitable in 2023. But Spanfeller sees the ad market improving with more economic certainty in 2024.
Details: A report from AdWeek last week suggested the company is shopping around some of its individual titles after failing to initially find a buyer for the whole holding group.
- Spanfeller said the firm will "chat with people from time to time about possible acquisitions" and sales, but noted that a full portfolio sale isn't expected this year: "I don't think that's in the cards."
Still, something probably needs to happen soon. Spanfeller added that the "use by" date for private equity companies tends to be around six to 10 years. "So we're coming up on that," he said.
- The union representing The Onion, a satirical site within G/O Media's portfolio, said in a statement Monday that Great Hill Partners "made an estimated $44 million in revenue in 2023."
Catch up quick: G/O Media was born out of the sale of Gawker Media to Univision for $135 million in 2016.
- Univision sold those assets under the rebranded name of Gizmodo Media Group to Great Hill Partners in 2019 for less than $50 million. The company later rebranded itself as G/O Media.
G/O Media is now parent to a number of niche consumer websites, including Gizmodo, Kotaku, The Root and more. It has been trying to streamline its portfolio for months amid a slowed ad market.
- The company shuttered its female-focused brand Jezebel and laid off 23 editorial staffers as part of a broader restructuring last November.
- It laid off 13 staffers last June and sold its lifestyle website Lifehacker to Ziff Davis in March.
- Spanfeller said the company did layoffs "because we would rather not be strapped for cash in the near future."
- Today there are fewer employees at the firm (215) than when Great Hill Partners acquired it. A spokesperson said G/O is trying to operate more efficiently, in part by removing layers of editorial bureaucracy and overhauling its ad sales staff and process.
Between the lines: Amid cuts, the firm has still been acquisitive. It bought the business news site Quartz for under $10 million in 2022.
- Spanfeller said he's interested in exploring titles in "passion areas" its portfolio doesn't currently cover, such as travel, music or possibly more news one day.
- Today, the firm's business is mostly dependent on advertising, with about 60% coming from direct ad sales and 40% coming from automated sales.
- It's begun offering advertisers "price guarantees" that essentially rebate marketers' money if they find the ads on their sites don't work.
- Given the volatility in the ad market, Spanfeller said his goal is to bring Quartz's membership model to other titles within its portfolio, but a broader blanket paywall strategy likely isn't in the cards.
The intrigue: Like many digital media firms, G/O Media is currently in a heated union battle with a union — in its case, the guild representing The Onion.
- The company has a history of union tension that's spilled over from years of management changes meant to reposition the holding group from a blogger-focused culture to more of a journalistic ethos.
- The Onion's union authorized a strike against G/O Media Monday ahead of its contract expiring on Wednesday.
- Spanfeller said the firm is currently at a standstill with the union over G/O's artificial intelligence efforts.
What to watch: The Onion's union wants policies outlining protections for journalists' work while the company experiments with AI, but Spanfeller argues, "It's impossible have a policy. We don't even know what it is."
- G/O executives had originally said they wanted to experiment with using AI to aggregate stories, but union tensions are slowing such efforts.