G/O Media, US private equity-owned publisher of digital news and entertainment brands including Gizmodo, Jezebel, and Deadspin, has acquired the struggling Quartz business news brand from the management who themselves bought-out the company in a 2020 MBO after which it laid-off 80 of its 180 staff. It is the third time Quartz has been sold, but the deal took the company’s staff by surprise after its CEO Zach Seward told the Financial Times two weeks ago he was “evaluating financing options, such as new minority investors…”
Quartz was founded in 2012 as part of Atlantic Media and acquired by Uzabase of Japan for $86m in 2018. It focusses on global business news and once said its competition as the Financial Times, Wall Street Journal and The Economist. It is said to complement the G/O Media stable of satirical news, pop culture and other niche properties. Quartz had revenues of $11.1m in 2021 (down 10% on 2020) and incurred losses of $6.9m. It was predicting breakeven in 2023 but G/O says now it will be profitable “by the end of this year”. The only time it has claimed a profit in its 10 years was in 2017 with revenue of $27.6m.
Quartz got rid of its paywall this month but will continue with its premium paid newletters which will also be G/O’s first subscription products The company tried and failed to raise $2-3m of finance last year, valuing the company at $20m. Terms of the acquisition by G/O have not been disclosed but the price is believed to be less than $10m.
Quartz co-founder Seward says that 80 of its 100 employees (which include 50 journalists) “will be eligible for deal bonuses from the proceeds of the sale, totalling more than $1m.” It is not known whether this is in addition to the proceeds from the sale of their shares. In a slightly odd announcement – given the Quartz lossmaking – Seward said G/O was committed to no lay-offs.
He told Press Gazette, in the UK: “Quartz and G/O have really complementary strengths,” Seward told Press Gazette on Thursday. “G/O is profitable, well capitalised, it has scale – an audience of 100m monthly uniques – and a good structure… G/O is building a really strong network of editorial brands and did not have a business news property in there. And now they do.”
Jim Spanfeller (ex Forbes CEO), CEO of G/O Media, told his staff: “Quartz is one of the marquee brands among digital native premium content destinations, ranked number one for readership among global executives between the ages of 25-45.”
Sean Griffey, CEO and co-founder of the 10-year-old, $110m-revenue Industry Dive who knows a thing or two about building a profitable startup, tweeted: “What jumps out to me about the Quartz news is:
- Lost $6.9m last year, drops paywall and will be profitable by the end of the year?
- The plan is to jam it full of programmatic ads
- A far cry from the original promise when it was part of The Atlantic”
MediaPost notes that the sale of Quartz may be of particular interest to the former president of Atlantic Media, who launched Quartz in 2012: “Now Justin Smith, most recently CEO of Bloomberg Media, along with the former New York Times journalist Ben Smith, is in the process of launching an international media brand called Semafor. The mission? It’s not dissimilar to Quartz’ in 2012. Semafor will be a digital-content brand that looks at news through an international lens, with local journalism across many countries.”
G/O Media was formed in 2019 after the private equity firm Great Hill Partners acquired web sites formerly owned by the bankrupt Gawker Media. After the Quartz deal, G/O owns 12 brands, including: Jalopnik (automotive), The Onion (satire) and The Root (black culture). The company is said to be profitable and to have increased its advertising revenue by 53% in 2021. Quartz is its first acquisition.