10 months ago, Univision bought Gawker in a fire sale, and it's been messy ever since
The man tasked with overseeing Gizmodo Media Group in the wake of the demise of Gawker.com says he never regularly read the site in the first place.
"I'm well past the demographic they were aiming for," CEO Raju Narisetti said in an interview. "If you ask me if it was a place I spent a lot of time on on a daily basis, the answer is no."
Narisetti is leading GMG through the media company's merger with Fusion Media Group, which is owned by the Spanish-language juggernaut Univision. According to the CEO, the transition has been a success.
But conversations with over a dozen current and former employees painted a starkly different picture.
Since the deal, the six former Gawker Media sites - Gizmodo, Jezebel, Deadspin, Kotaku, Jalopnik, and Lifehacker - have struggled with indecision, a dysfunctional bureaucracy, and an exodus of top leadership and institutional knowledge that gave Gawker Media its editorial bite.
Mergers have a tendency to be messy, and Gawker Media's entry into Univision's portfolio is far from the most troubled media acquisition in recent history.
News Corp. bungled its mid-2000s takeover of Myspace after failing to cater to the social-media platform's users and trying to monetize the site too quickly, for example, while the 2000 merger of then newspaper giants Tribune Media and Times Mirror Co. generated massive turnover at the company, public infighting among shareholders, and eventually bankruptcy. Then there's the infamous AOL-Time Warner deal, and AOL's current complicated merger with Yahoo.
Still, many GMG staffers wonder what will remain of the clever, fearless attitude that defined the sites for millions of readers and set the tone for much of the independent web.
"A lot of people who made Gawker Media what it was have either left or been so beaten down that the company it used to be doesn't exist anymore," one GMG employee said.
"Some of the Gawker ethos is sort of showing up in the publications that people have dispersed to, but it's never going to be the same. Univision claimed that they wanted to buy Gawker because they believe in 'fearless journalism,' but every decision they've made seems to be an effort to either water the Gawker spirit down as much as possible or just bolster Fusion TV in some way."
A 'pretty good,' 'challenging' year
Univision bought Gawker Media last August in a fire sale. It shuttered the iconic Gawker.com, which was viewed as toxic after a court ordered Gawker Media to pay Terry Bollea - aka Hulk Hogan - $140 million for publishing a sex tape featuring the wrestler. The lawsuit was secretly funded by Peter Thiel, the early Facebook investor and board member who was publicly outed by the publication as gay years earlier.
The company bought Gawker Media, which it renamed Gizmodo Media Group, with the hope of broadening the audience to become the voice and reflection of an increasingly diverse young America, with a slightly less intense editorial focus on the trademark skepticism and disdain for powerful interests.
Now, several months into the merger, Narisetti said that contrary to the "conventional wisdom," data shows it's been a "pretty good" few months since the six sites were bought by Univision and joined with Fusion.net and The Root.
The CEO, who joined GMG in October from News Corp., rattled off top-line statistics that showed a company growing after a tumultuous multiyear legal battle with Hogan that took the company from a $250 million valuation to bankruptcy.
Narisetti said last week that even after he had hired 53 new full-time staffers across the websites, the company remained under budget and on target to experience a 30% increase in revenue across the sites in one year.
Traffic to the sites has remained steady at about 90 million monthly unique visitors since he took over in October, certainly an accomplishment considering Fusion's notoriously poor online traffic and the loss of the 15 million to 16 million monthly uniques that Gawker's flagship website generated.
Other Fusion Media Group sites that were integrated into the GMG portfolio have thrived. Since transitioning over to GMG's Kinja operating system in January, the African-American digital magazine The Root has 35% more uniques each month than it did in the same months last year.
Narisetti's longer-term goal is to turn the network of sites into a publication catering to a diverse, young America of the future. By 2028, Narisetti said, "a majority of young Americans will be nonwhite."
"Our view is," he added, "while there are a lot of go-to brands for Americans today, there aren't a lot of go-to brands for what is going to be a much more diverse young America."
But he acknowledges it hasn't always been easy to execute that vision.
"At an all-hands I joked, 'I've never lost more sleep and gained more weight in the same period,'" Narisetti said. "It's been a great and a challenging year."
For many GMG employees, "challenging" is an understated description of the past several months.
The Gawker ethos is fading
Conversations with more than a dozen current and former staffers over the past several weeks detailed a difficult integration that has chipped away the spirit and ethos of Gawker Media, founded 14 years ago by Nick Denton as two blogs covering media and tech gossip, which eventually evolved into the fiercely independent, proudly standoffish, endlessly navel-gazing media company targeted by Thiel and Hogan.
Staffers say they felt initial relief after Univision beat out the media company Ziff Davis to buy GMG out of bankruptcy for $135 million. But now the environment is, as one employee put it, "toxic," and as downcast as it was during some of the Hogan trial.
"Every day, morale got worse because it felt like Univision was determined to stamp out all the great things about working at Gawker Media," one former GMG staffer told Business Insider. "They had no interest in maintaining our editorial philosophy, having a functioning HR department, or retaining key talent."
In the nine months since the acquisition, the company formerly known as Gawker Media has seen an exodus of top talent and leadership.
Heather Dietrick, the president of Gawker Media and then of GMG, left in May for The Daily Beast. The editorial team's second-in-command, deputy executive editor Lacey Donohue, left in late 2016 and was followed by the executive managing editor, Katie Drummond, in March. Matt Hardigree left the company in May after working as the editor of Jalopnik and partnerships. High-profile reporters like Christina Warren and Ashley Feinberg have also left the company in recent weeks.
The heads of the human resources and legal departments, both figures with outsize power and importance at the formerly independent, freewheeling company, also departed in the early months of the acquisition.
Business Insider has counted the resignations of at least 26 former Gawker Media employees since the merger, many of them in editorial-leadership positions.
GMG's women in leadership
After years of questions about its own relationship with female leaders at the company, the final iteration of Gawker Media was one with women in the most senior roles in the company, a source of pride and loyalty for many staffers.
But months later, with top leaders departing, some employees wonder whether the company is doing enough to persuade respected female leaders to remain, and if the company will suffer from the talent and leadership losses its already experienced.
"People are really worried about this," one GMG employee said. "Just since Katie left, we've lost our president, our top video journalist, and our best reporter, and that's after a big all-hands meeting where people were really clear about how alarming the pattern was.
"There are women being promoted or hired into positions of power, and I'm sure there will be more, but even if the higher-ups do all the right things from now on, it's not like you can really fix it, because you've lost so many of the people who made the place what it was at its best."
As WWD reported, after Drummond's departure in March, the editorial union wrote a strongly worded letter to management criticizing the loss of top female leaders.
"We were extremely alarmed to hear that Katie Drummond will not become executive editor and instead leave Gizmodo Media," the letter said.
"It continues a disturbing pattern of top management's failure to retain women in positions of authority, and raises serious concerns about the company's commitment to honor its contractual obligation to editorial independence. Further, it is yet another sign that Univision still has not found a way to manage the successful independent media company it acquired months ago."
Drummond's departure remains a source of tension.
According to multiple sources familiar with the situation, Drummond was paid significantly less than the company's previous top editor, John Cook, while essentially filling in for him for several months without a title change. And when she was offered the title of executive editor, the sources say, Drummond was told it was "rude" to ask for a raise.
Narisetti told Business Insider that although he would not discuss private discussions of compensation, the characterization was inaccurate, as Drummond was assisted by the newly created role of deputy executive managing editor specifically created to support her while the company mulled who would fill the executive editor position that would oversee now eight sites, including The Root and Fusion.
At the same time, two sources said, Dietrick "was almost completely sidelined" by management after the acquisition late last year, as Narisetti and others assumed many of her previous responsibilities.
Narisetti dismissed charges that GMG's struggle to retain women in top roles was a cultural problem at the company.
Though he said he was "not minimizing" the effect many top women like Dietrick and Drummond had during the past several years, he pointed out that GMG's editorial leadership remained slightly more female than male, and he emphasized he was not "going to play defense on it."
"Our track record and actual data on compensation, raises, promotions, diversity, as well as our ability to attract and retain employees who want to stay dedicated to the impactful journalism being done every day across GMG, more than speaks for itself," Narisetti said in a statement.
"I'm more concerned about my character than my reputation, because my character is who I am and my reputation is what others think I am," he said previously. "One is permanent, and one is changeable based on people's views. I have no doubt that we've lost some people and no less and no more than a lot of companies do in the first year of an acquisition and a merger and an integration."
'An unexpectedly bumpy transition'
Beyond struggling with holding together the former Gawker editorial team and mission, Univision also lost the confidence of many employees with basic operational issues that surfaced while it tried to integrate its new acquisition.
Numerous bureaucratic problems became almost immediately apparent, making the formerly nimble independent company feel like a dysfunctional cog in a massive, sluggish machine. For example, employees say Univision's teams responded slowly or were unresponsive to significant payroll and benefits problems that roiled the company for months.
The company delayed annual raises, they continued, and multiple staffers received accidental notes that stated other employees' salaries. According to two sources with direct knowledge of the incident, one GMG editorial staffer was accidentally sent a list of individual salaries for the entire editorial union, amounting to hundreds of people. In it, the person discovered that a peer in the editorial staff was being paid more than $400,000, a significantly higher number than most of the newsroom.
Employees faced similar problems with benefits.
Several employees say they had their insurance denied on visits to the doctor and were unable to pick up prescriptions. Others were charged for insurance they did not select, a source said. Two people recalled a top site editor having their newborn child go weeks without health-insurance benefits.
Narisetti acknowledged that payroll and benefit issues had been a source of anxiety for the staff, telling Business Insider that the company "didn't have a plan B in place" when Gawker's HR team left en masse.
In an all-staff email sent in February that was provided to Business Insider, the CEO apologized and said GMG was working on the issues, though benefits and HR problems persisted to the point that the editorial union in April gave the company a one-month deadline to resolve them.
"It has been an unexpectedly bumpy transition, to put it mildly," he wrote. "And I want to personally acknowledge and apologize on behalf of Univision, FMG and GMG, for all the stress and angst this is causing. Like all of you, I am also inclined to focus on our journalistic and business challenges than dissipate any of our time and energy on fighting internal issues. But we clearly need to get these internal issues in order and we will."
'Water down the Gawker spirit'
For its part, GMG has made explicit attempts to continue Gawker's history of provocative investigations.
Cook - who moved from executive editor to oversee the special-projects desk - oversees a team primarily made up of former Gawker writers.
He told Nieman Lab last month that the creation of the investigations unit "sort of offset the loss of Gawker" by continuing to pursue provocative investigations such as showing it to be quite easy to spear-phish top government officials.
"From a distance, it seems like the acquirer values the investigative journalism from John Cook and his team," Denton, the Gawker founder, told Business Insider in an email when asked about the merger. "I'm glad to see Univision's support for investigative journalism at Gizmodo."
But GMG staffers are also having to adjust to a new environment under heightened internal legal scrutiny.
Stories have also had to clear higher legal barriers in a way that some employees feel is overly cautious and almost distrustful of the sites' aggressive, provocative journalism, but the company says is the standard operating procedure for most major media organizations.
According to employees with knowledge of the process, staff members on the special-projects desk are required to get the site's legal team to sign off on any story they write, even basic blog posts with no original reporting, and still have no official website months after launching, negotiating with other GMG sites about which site might best host an investigation.
Four current and former employees said the site's legal team was very cautious of publishing exclusives about Thiel's personal life and intentionally slowed reporting related to the tech billionaire, who financially supported the lawsuit that bankrupted Gawker.
In an email to members in June obtained by Business Insider, the editorial union said it unsuccessfully tried to remove a non-disparagement clause from separation agreements. Non-disparagement clauses are commonplace in separation agreements, but some employees have taken them as a sign of hostility from management to staff.
Staffers say they were similarly infuriated by the company's decision to remove controversial posts tied up in litigation and, without an official company policy, fear that it could happen again.
"It was extremely difficult to watch Univision's lawyer decline the opportunity to defend their own colleagues' work against a malicious legal attack," one GMG employee told Business Insider. "People are absolutely concerned that Univision will try to remove posts in the future."
FMG and GMG managers have also shied away at points from easy opportunities to hat-tip Gawker's legacy.
When in February staffers tried to host a public screening of "Nobody Speak: Trails of the Free Press," a documentary about Gawker's battle with Hogan, Narisetti, upon consulting with Univision executives, initially vetoed the proposal, eventually allowing only a private, staff-only screening of the film.
In an email praising the "rich, collective past/legacy" of Gawker, Narisetti noted that the company implemented a policy of not engaging in discussions or debates on Gawker Media estate issues.
"We continue to face some ongoing business challenges around effectively communicating the premise and promise of the new GMG/FMG, and to keep moving ahead in 2017, as we continue to still be hobbled by some (diminishing) past business perceptions," he wrote. "That is somewhat relevant in this particular context - though quite secondary to the company policy of not discussing Gawker issues - as a public forum/panel around the movie, hosted by FMG/GMG, can easily and unnecessarily add to that ongoing challenge."
'That was a rough six months'
Narisetti argued that the hardest part of the transition was behind GMG.
Several employees who lamented the mess of payroll and benefits said that since the company brought on a new HR representative last month, fewer problems had spilled out into the open.
The company, too, has prepared to begin seriously building out the GMG properties for the first time since the merger.
Fusion, which confusingly ceded its Fusion.net domain last month to the Fusion television channel, is set to relaunch with a new domain name in June.
In addition to a parenting site it launched last week, according to one source, the company plans to launch at least three new sites. (Narisetti hinted at food, music, and the environment, though Business Insider could not confirm the details.)
The Univision-owned AV Club and Onion websites are expected to migrate over to Kinja during the slower summer months, creating one universal content management system and allowing the company to increase revenue by selling the entire package of sites to advertisers as a whole.
"My view is that we look back next year and say, 'That was a rough six months,'" Narisetti said. "Our journalism has held out, we're producing great stories. I use the famous Ronald Reagan line, which is, 'If you're committing acts of journalism at GMG, are you better off today than you were seven months ago?' I think almost everybody will have to answer the question 'yes.'"