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Illustration: Sarah Grillo/Axios

Private equity's newest political headache came last Thursday when G/O Media shut down Splinter, a left-wing publication with 7 full-time employees. One day later, Elizabeth Warren placed the blame squarely on G/O Media owner Great Hill Partners.

Why it matters: Warren does have a plan to change private equity, but it wouldn't directly impact Great Hill Partners' ownership of G/O Media.

Context: After G/O Media shut down Splinter News, Warren tweeted: "Private equity firms are sucking value out of our companies, putting people out of work, and wiping out newspapers and digital news outlets like @Splinter_News. I have a plan to hold these firms accountable."

  • Great Hill formed G/O Media this past spring via the purchase of Gizmodo Media Group and The Onion from Univision. Splinter was part of Gizmodo, alongside several other sites that Univision had acquired via the Gawker bankruptcy (Deadspin, Jezebel, Kotaku, etc.). No pricing terms were disclosed, although Great Hill reportedly paid less than the $135 million check Univision had originally cut.
  • Great Hill did disclose that its purchase was all-equity. Managing partner Christopher Gaffney confirmed that with me yesterday, adding that there was no assumed debt, nor had any been put on G/O Media since the purchase.

Details: Warren's plan focuses on leverage, making private equity funds liable for portfolio company debt. G/O Media has no debt, thus wouldn't be affected by that plank of Warren's plan.

  • To be sure, this is where Great Hill obviously does have some strategic culpability, since it hired the executives overseeing Splinter's staff.
  • There also may have been search and social media algorithm changes outside of both of their control.
  • In terms of jobs, G/O told Splinter's 7 employees that there were 9 open editorial positions within the company, and that it hoped to enable internal transfers. But it's unclear if Splinter's staffers are qualified for those jobs. Moreover, editors of other G/O sites are said to have final say on hiring, so it's more about job opportunities than actual jobs.
  • Spinter's ex-editor didn't return a request for comment.

What they're saying: Gaffney puts the blame for Splinter's failure on the site's audience declines, which he says fell 75% from its Univision-owned peak, rather on than a lack of financial performance. "It had nothing to do with making money, because we co-mingle the audience for ad sales."

Splinter illustrates the fundamental flaw of one-size-fits-all policy prescriptions for private equity, whether from Warren or anyone else.

  • Same goes for universal criticisms or plaudits.

The bottom line: Private equity did kill Splinter, in the sense that Great Hill pulled the plug. But it shouldn't bear sole blame for the underlying disease that has spread throughout media, including among both those that do and don't have private equity backing.

Go deeper: Private equity takeovers result in significant job losses

Editor's note: This story has been corrected to reflect the company name is Splinter, not Splinter News.

Go deeper

Justice Department drops insider trading inquiry against Sen. Richard Burr

Sen. Richard Burr (R-N.C.) walking through the Senate Subway in the U.S. Capitol in December 2020. Photo: Stefani Reynolds/Getty Images

The Department of Justice told Sen. Richard Burr (R-N.C.) on Tuesday that it will not move forward with insider trading charges against him.

Why it matters: The decision, first reported by the New York Times, effectively ends the DOJ's investigation into the senator's stock sell-off that occurred after multiple lawmakers were briefed about the coronavirus' potential economic toll. Burr subsequently stepped down as chair of the Senate Intelligence Committee.

Netflix tops 200 million global subscribers

Illustration: Rebecca Zisser/Axios

Netflix said that it added another 8.5 million global subscribers last quarter, bringing its total number of paid subscribers globally to more than 200 million.

The big picture: Positive fourth-quarter results show Netflix's resiliency, despite increased competition and pandemic-related production headwinds.

Janet Yellen plays down debt, tax hike concerns in confirmation hearing

Treasury Secretary nominee Janet Yellen at an event in December. Photo: Alex Wong via Getty Images

Janet Yellen, Biden's pick to lead the Treasury Department, pushed back against two key concerns from Republican senators at her confirmation hearing on Tuesday: the country's debt and the incoming administration's plans to eventually raise taxes.

Driving the news: Yellen — who's expected to win confirmation — said spending big now will prevent the U.S. from having to dig out of a deeper hole later. She also said the Biden administration's priority right now is coronavirus relief, not raising taxes.