The Messenger, the ostentatiously both-sides-y online publication launched just eight months ago with an impressive wad of startup capital and ambitions of rescuing media, kerploded very suddenly and rather spectacularly Wednesday afternoon. The news was broken around 4 p.m., to readers and staff alike, by the New York Times and Semafor, and later confirmed via a short memo from founder Jimmy Finkelstein. The Messenger's 300 or so working journalists barely had time to confirm that they'd lost their jobs before they were bounced from the company's Slack channel; by the close of the business day, the publication's homepage had been scrubbed and its thousands of stories memory-holed.
The scope of this failure is dizzying. Finkelstein, formerly the co-owner of The Hill, took in $50 million of investor funding before launching The Messenger. That money bought not even one full year of operations. Here I feel I must emphasize that this was not a massive underground particle accelerator or a Formula 1 team, but a publisher of blogs on the internet. Readers of Defector's annual report will note that operating Defector over its most recent fiscal year cost about $4.4 million. That money paid for a 23-person editorial staff and a(n extremely overworked) two-person operations team. It paid for solid benefits; it paid for meager but sufficient office space; it paid for excellent freelance work; it paid for reporting adventures; it paid for operations-side contractors, and lawyers, and laptops, and office lunches, and company retreats. It almost paid for NBA League Pass. For the low, low price of $22 million, you could have five entire Defectors. That's at least 115 journalists! Finkelstein could've had five entire Defectors for an entire year of operation and still had $28 million in reserve headed into Year 2.
It's hard to escape the conclusion that The Messenger was engineered for failure. In its first months of operation—a period in which Finkelstein cannot reasonably have expected The Messenger to generate enough in advertising revenue to pay for anything approaching, let alone beyond, the normal operation of a very large digital newsroom—the company reportedly dumped something approaching a quarter of its startup capital on luxuries and frivolities. The Messenger seemed to have no sense of itself as a startup: At launch it had already opened offices in New York City, Washington D.C., and West Palm Beach, Florida. For its New York headquarters, the company leased 42,000 square feet of the 25th floor of a corner building in Manhattan's Financial District, home of some of the most expensive commercial real estate on the planet. Jordan Hoffman, who until The Messenger's shuttering worked as one of the site's senior entertainment writers, wrote for New York magazine Thursday that this glamorous skyscraper headquarters was usually "nine-tenths empty," featuring "rows and rows of spotless, expensive-looking desks" that sat mostly unoccupied. The New York Times reports that the company's three offices cost The Messenger more than $8 million in rent; Semafor reported that a leaked company balance sheet showed millions more in travel and entertainment expenses.
Finkelstein's ambitions for this operation were never anything but ridiculous. The Messenger famously planned to hire 550 full-time journalists in its first year of operation, although it only made it to around 300 hires before anyone near the top of the corporate hierarchy noticed that money was quickly becoming a problem. A CNBC report from January said that The Messenger spent $39 million on hiring; some quick back of the envelope math says that the average salary at The Messenger would've been in the very healthy neighborhood of $130,000. But the number appears to have skewed wildly in favor of leadership and management: The New York Post reported Wednesday that editor-in-chief Dan Wakeford was brought on with a whopping $900,000 salary. The division of responsibilities at The Messenger appears to have been insane: Reporter Eli Walsh, who worked at the company as a "news and audience reporter," wrote on Twitter Wednesday that he published an astonishing 630 stories at The Messenger, a frantic SEO grind that Walsh considered "deeply embarrassing and humiliating" and left him with "no usable clips" to show for eight months of hellish labor. Not that he or any other laid-off staffer would have clips in any case, as The Messenger is no longer a functioning website.
The site's writers were forced to churn out empty-calorie slop in a desperate game of SEO whack-a-mole because of Finkelstein's breathtakingly wrongheaded business model, which sought to generate $100 million in annual revenue from programmatic advertising. But programmatic advertising is no longer calibrated for human work or human traffic or primary income. It is now tuned to fire pennies at bot-run content filters for engaging in digital high-fives with search algorithms. A chumbox ad gaining an honest click from a reader of sound mind and body is roughly equivalent as an outcome to me sticking my tongue out in a snowstorm and having a fresh and whole pastrami on rye land inside my mouth: The ad is not there for humans any more than I am there for a well-made sandwich, but sometimes randomness delivers a happy outcome. The volume of traffic needed to deliver $100 million in programmatic ad income would be astronomical; it should surprise no one to learn that this model delivered to The Messenger an unambiguously non-whopping $3.8 million in revenue by the end of 2023, or less than half of what the company spent just on offices.
Finkelstein was still gloating about big traffic numbers and promising a huge turnaround in revenue as recently as January; in his memo to staff Wednesday afternoon, he said that he was still hunting around for another infusion of investor capital in The Messenger's final hours of operation. The investor class will throw some appalling sums of cash at some genuinely absurd enterprises, but even these freaks could not miss that this was a hopeless and doomed undertaking. Another $20 million might've bought The Messenger another few months of operation, but unless it also bought them a time machine it would never have delivered them to within light years of solvency. Finkelstein was out there talking up the potential of a yet-to-come video operation in a digital media environment where that particular avenue was revealed to be not just underwhelming but an actual scam an entire damn decade ago. In what way was this ever going to work?
Perhaps it was because of this deluded belief that his company could ever survive in anything even vaguely approximating either its existing form, or the even more outrageous one originally envisioned by its founder, that The Messenger burned through the absolute last of its cash before finally admitting defeat. Laid-off staffers will reportedly not receive any severance from the company, and their company-funded healthcare plans were terminated in the surrender. Hoffman says at least one reporter out on assignment was left to wonder whether their expenses would still be reimbursed; one staffer was booted from company communication channels while actively asking whether an upcoming surgery would still be covered. The Messenger brought a bunch of good journalists together into a long-shot endeavor, let only a tiny handful of them do good work, buried that good work under an endless torrent of SEO garbage, and finally, when it did the only thing it was ever capable of doing and exploded, the company threw everyone out onto the street with nothing at all to show for their work. What an incredible waste.
Recommended
Stay in touch
Sign up for our free newsletter
