In Media, the Cuts Keep on Coming
Click here to read the full article.
The pain felt by alternative weeklies turned out to be just the beginning of the crippling impact the coronavirus is having on the already struggling media industry.
With advertising revenues continuing to plunge as brands across the board slash marketing budgets, an increasing number of publishers of all shapes and sizes are being forced to take drastic measures to keep their heads above water.
Among them is Maven Media, the publisher of Sports Illustrated. It laid off 31 people this week, the equivalent of 9 percent of its staff, and shrank executive pay by almost a third. Around 6 percent of Sports Illustrated journalists, who were hit by a separate round of layoffs in October and are currently trying to form a union, were impacted.
In a memo to staff, chief executive officer James Heckman explained that it’s expecting a $30 million loss in revenue this year due to the cancellation of major sporting events such as March Madness and the Olympic Games.
“We’re anticipating a $30 million reduction in revenue for 2020, comprised of a $17 million reduction in sponsorship sales, $10 million reduction in programmatic CPM-driven sales, and $3 million in other revenue initiatives, such as events,” he said.
Gannett, the owner of USA Today and 100-plus other newspapers, also revealed plans to furlough some journalists beginning next week, in addition to reducing executives salaries by 25 percent.
Like many other news outlets, ceo Paul Bascobert, who will waive his salary for the time being, told staffers that a surge in engagement, especially in COVID-19 stories, has not been matched with a rise in advertising, weighing heavily on the company’s performance.
“Direct sold advertising has already slowed and many businesses paused their scheduled marketing campaigns,” he said in a memo.
Elsewhere, business magazine Fortune has put a temporary hold on hiring freelancers, with the intention of resuming its work with them once it’s back to its normal business operations due to the postponement of all its conferences through early June.
And it’s not just print and digital publishers that are feeling the pain in the media world. iHeartMedia, which owns radio stations and a relatively new podcasting network, has furloughed an unknown number of employees, and has implemented executive pay cuts, according to Variety. A spokeswoman did not respond to request for comment.
Others are attempting for now to avoid layoffs or furloughs, but are navigating the crisis through salary reductions and other cost-cutting measures.
They include Group Nine, the publisher of PopSugar, Thrillist and NowThis, which just postponed annual festival Play/Ground that attracts around 15,000 attendees and 200 brand partners. It confirmed that it is cutting executive pay by roughly 25 percent, while ceo Ben Lerer is forgoing his salary for the next six months. Other measures it’s taking include a hiring freeze, halting its summer internship program, temporarily suspending the match on its 401(k), as well as “drastically” cutting discretionary spending.
Brooklyn-based Vice Media also introduced a pay cut Monday for many employees for the next 90 days. Executives will see their pay reduced by 25 percent, with ceo Nancy Dubuc swallowing a 50 percent cut, as first reported by CNN and confirmed by Vice. Staffers taking home $125,000 will have to endure a 20 percent cut and also work a four-day week and those making between $100,000 and $120,000 face a 10 percent fall.
This was a similar strategy to the one employed by BuzzFeed last week when it informed staffers that they would have to take a graduated pay cut for the months of April and May, with the situation being reviewed on a monthly basis. Founder and ceo Jonah Peretti plans to give up his salary during this time.
Other publishers are holding off — for now. Edward Felsenthal, the editor in chief and ceo of Time, took to Twitter to say that it’s pledging no layoffs for 90 days. “We will also continue to ensure our hourly workers are paid while our offices are closed,” he added.
But if the crisis drags on and advertising continues to slump, more companies will have little choice but to take action and if that comes in the form of more layoffs, unions argue it could damage public health.
“Our nation simply cannot afford to furlough or lay off journalists and other news industry employees in this time of crisis,” said Jon Schleuss, NewsGuild-CWA president, which represents hundreds of Gannett staffers. “People need reliable local news during this crisis — they need to know where the tests are, which hospitals are overwhelmed and how many of their neighbors have died. They need reporters holding federal, state and local officials accountable.”
For more see:
Coronavirus Pressure on Media Spreads From Alt-Weeklies to Digital News Outlets, Magazines
Coronavirus’ Impact on Italian Jewelry: A Negative Domino Effect
Positivity, Creativity and Technology: How Adrian Cheng Fights Coronavirus
WATCH: The Business of Street Style Photography
Sign up for WWD's Newsletter. For the latest news, follow us on Twitter, Facebook, and Instagram.
