Univision terminated its foray into the pureplay digital-media realm with the sale of Gizmodo Media Group and The Onion earlier this month — for a fire-sale price significantly less than $135 million the broadcaster paid for only the former Gawker Media properties two and half years ago.
The new owners of the suite of websites are private-equity firm Great Hill Partners and Jim Spanfeller, a longtime media executive, who serves as CEO of the newly formed G/O Media and owns a minority stake in the company.
Spanfeller, in an interview with Variety, said he remains very bullish on G/O Media’s ability to build a thriving digital venture. And, he said, there are no plans currently to make significant layoffs at the company, which has just over 400 employees, as it separates from Univision.
“We don’t plan to cut our way to growth,” Spanfeller said.
That said, Spanfeller said G/O Media will be “looking to run things more efficiently” and improve the company’s cost structure by providing “more direction that has been lacking” — referring to Gizmodo Media Group’s ownership under Univision.
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“We are confident we can make this a profitable, fast-growing business,” he said.
For now, G/O Media isn’t planning to shut down any of the properties it acquired. Those are Gizmodo, Jalopnik, Jezebel, Deadspin, Lifehacker, Kotaku, Splinter and The Root; and The Onion, which includes its flagship satire publication, entertainment outlet A.V. Club, ClickHole and The Takeout.
Worth noting is that according to the Writers Guild of America East, which represents 233 employees at the former Gizmodo Media Group and Onion, its members will continue to work under union-negotiated terms and conditions with Great Hill’s acquisition.
In splitting from Univision, G/O Media is planning to move into new New York offices on May 4 — at 1540 Broadway in Times Square, in space sublet from Viacom — and is looking for an office in L.A.
Spanfeller declined to comment on reports that the price tag on the Gizmodo Media Group/Onion sale was under $50 million, saying only, “We feel we got a very good deal.”
In aggregate, the collection of properties reaches about 100 million unique monthly visitors, although that’s 70 million-80 million backing out third-party sites that are part of the G/O Media group ad network.
“The more time we spent with the data the more excited we got,” Spanfeller said. Besides comprising a large audience, it also skews younger to provide better reach among consumers 18-34 than Vice, Vox, BuzzFeed or Group Nine, according to Spanfeller. “Then what was really interesting was how engaged they are with their audience — they’re not dependent on social media.”
Spanfeller, former CEO of Forbes.com, most recently built Spanfeller Media Group, whose properties included The Daily Meal and The Active Times; in December 2016, he sold the company to Tribune Publishing Co. (then called Tronc).
As part of standing up G/O Media as an independent entity, Spanfeller recently hired a chief technology officer and CFO (as the execs providing those functions for Univision’s Gizmodo Media Group are remaining with the Hispanic broadcaster). Spanfeller said G/O Media is currently looking to hire a chief talent officer to run HR.
The company’s new CTO is Jesse Knight, who was CTO/CIO of Vice Media from 2012-17. He started his career at Solid Sender, a development and consulting practice he founded and ran after graduating from McGill University. Filling in the CFO spot is Tom Callahan, who most recently was CFO of BandLab Technologies (where he helped support media operations and manage its investment in Rolling Stone, now owned by Penske Media Corp., the parent company of Variety). He previously worked with Spanfeller at Forbes Media.
Given the challenges for digital media players across the spectrum, can G/O Media make a go of it? The company’s websites have been running in the red: Gizmodo Media Group’s properties generated over $80 million in revenue in 2017 but lost $20 million, the Wall Street Journal reported.
Spanfeller declined to discuss specifics of the company’s financials. But he insisted G/O Media can become a viable business on its own, without needing to engage in any M&A. “We are open to incremental things we can add to the company,” he said. “But I don’t think it’s a situation where you do bolt-ons or die – you do bolt-ons and then you can be more efficient on the back-office side.”
Univision bought the Gawker assets in a bankruptcy auction (which didn’t include Gawker.com), after Gawker Media was sued into bankruptcy by Silicon Valley billionaire Peter Thiel. Univision acquired a 40% stake in The Onion in January 2017 for an undisclosed amount.
Separately, Gawker is slated to relaunch this year under Bustle Digital Group, after CEO Bryan Goldberg paid $1.35 million for the media gossip blog.