G/O Media CEO publishes "epilogue" after Kotaku sale
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Jim Spanfeller. Photo: Piaras Ó Mídheach/Sportsfile for Collision via Getty Images
G/O Media CEO Jim Spanfeller said the company is winding down in a candid "epilogue" published Wednesday, after the sale of gaming news site Kotaku, where he defended his record and took aim at unions and ad tech.
Why it matters: Once a portfolio of prominent digital outlets like Deadspin and Quartz, the company has only one site remaining, The Root, which it is also looking to sell.
Driving the news: Spanfeller said the decision to sell G/O Media's assets came as its private equity owner, Great Hill Partners, recognized that the "hockey stick" growth expected pre-pandemic was not realistic amid media downturns and platform dominance.
- "In short, given their business model and frankly my own plans, the time had come. ... 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," Spanfeller wrote.
- Spanfeller noted that selling the entire company would have been an easier process but proved difficult. Instead, the company sold individual brands. "A quest we are still on with The Root, a truly powerful and important voice in Black America," Spanfeller wrote.
- Spanfeller claimed more than 70% of G/O Media's editorial staff were offered jobs after the sales.
The big picture: Spanfeller defended G/O Media's business record, compared to Vice, BuzzFeed, Business Insider and Vox. He contrasted G/O Media's outcome of "increased shareholder value" compared to "shareholder value erosion and employee downsizing" at the other digital media companies.
- Spanfeller also critiqued digital media unions, describing them as "counterproductive," taking "extremely combative positions" and a "one size fits all approach" that is not in sync with knowledge work.
- "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," Spanfeller wrote.
- Spanfeller cited issues with Deadspin as a "poster child" for editorial and business being at odds. He referenced the mass staff resignation after G/O Media management requested the site focus coverage on "just sports" and said the site was sold for a profit after hiring a new team.
Between the lines: Spanfeller also noted broader issues with digital media, referring to ad tech as a "parasitic drag on the entire industry" and expressing caution and some optimism about AI.
- "[C]onsumers 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," Spanfeller wrote.
- Spanfeller also defended G/O Media's efforts to innovate, including its experimentations with AI.
What we're watching: The Root is still up for sale.
