National Geographic is the 135-year-old US magazine that started life as a dull, text-only publication for the 165 serious-minded, charter members and famous explorers of the National Geographic Society (NGS). They were bound together by a passion for geography, science and travel.
Their scholarly journal changed when society president Alexander Graham Bell (the Scots-born inventor of the telephone, no less), had a vision for something more popular and visual. Believe it or not, its pioneering photo-journalism began as a desperate attempt to fill 11 pages of the January 1905 issue before it went to press. The editor-in-chief said: “There is no tyranny so absolute as a printer’s deadline, but I simply did not have a good manuscript available. A large and rather bulky envelope lay on my desk. Still brooding about the unfilled pages, I opened the package listlessly … then stared with mounting excitement at the enclosures that tumbled out. Before me lay some 50 beautiful photographs of the mysterious city of Lhasa in Tibet.”
That almost accidental introduction of photography was so controversial that two of the society’s trustees resigned in protest at what today would be described as “dumbing down”. But it was a game-changer for the magazine itself which became best known for its spectacular photography – and the trademark yellow border. It’s impossible to imagine the Nat Geo brand without the visual hooks: photos are vital, reflected in the fact that its long been the number one media brand on Instagram.
The pioneering magazine had been born in the final years of the 19th century alongside the likes of Vogue, Cosmopolitan and Good Housekeeping. But its dramatic success stands out almost as an adornment of a society whose primary objective is “to illuminate and protect the wonder of our world through science, exploration, education and storytelling”.
Since 1888, the NGS has awarded more than 15,000 grants for scientific research, exploration and education, reaching a claimed 3mn students every year through education offerings – and its magazines, digital and broadcast media have spread the words and pictures around the world. The growth of the society – whose membership soared from 1,400 to 713,000 in the first two decades of the twentieth century – was largely attributed to the content, style and inspiration of the magazine and its first-hand commentary from luminaries such as Charles Darwin.
It has always been more than a mere communications vehicle for one of the world’s leading non-profit scientific and educational organisations. It was launched, after all, just months after the society itself and is still much better-known worldwide than the expeditions, research projects, and exhibits recorded on its pages and TV channel. Its pioneering did not stop with its innovative use of high-quality photography. It also became the first US publisher: with a color-photo lab (in 1920), to publish underwater colour photographs (1927), to print an all-colour issue (1962), and to print a hologram (1984).
The content has always started with the people sometimes described as the “dreamers”: explorers, photographers, scientists and adventurers who receive NGS travel grants to go to all corners of the world and tell their amazing stories. The brand is notably dominant in the animal category but is also central to the intensifying discussions everywhere of the big issues of climate change, food waste and environmental protection. It’s a magical brand that seems even more relevant today than it did back in 1888. And one of its key executives still has the title “Head of Storytelling”.
But the magazine is not, of course, what it was. It once had some 13mn subscribers (almost wholly in the US) in the late 1980s but now has a global audience of just 2.5mn across local language editions in 25 countries. That’s the story of print everywhere, of course. But National Geographic now boasts no fewer than 750mn followers across all major platforms. Its Nat Geo Channel, Nat Geo Wild and Nat Geo Mundo TV reaches 433mn households in 45 languages across 171 countries. In the post-digital era, Nat Geo is a bigger than ever before.
That’s where the real story starts.
In 2015, the NGS took the decision to divest all its media – magazines, studios, books, maps, and related digital and social media platforms – into a commercial joint venture, National Geographic Partners, in which it would retain a 27% shareholding. It was a controversial move, not least because the 73% controlling partner was 21st Century Fox whose chair Rupert Murdoch had, among other things, described climate change advocacy as “endless alarmist nonsense”. To say the very least, the world’s most successful media entrepreneur seemed seriously out of step with everyone at National Geographic.
But the NGS had actually first partnered with Fox in 1997 to launch the National Geographic cable channel, followed by a fleet of smaller TV channels that grew to become the organization’s most valuable assets. The 2001 launch of the National Geographic cable TV channel had actually marked the society’s relatively late move into the media that now defines the brand for millions of people throughout the world. Although it had long co-produced documentaries with public broadcasters, trustees had reportedly been sniffy about the idea of operating a cable channel until it was almost too late – and certainly had become more expensive. Fox made it happen.
In 2015, the money talked. Fox paid the society $725mn for its 73% of National Geographic Partners, effectively valuing the brand at $1bn.
The windfall almost doubled the society’s endowment and seemed to guarantee that its work could continue in perpetuity. The alternative, according to the society’s then chair “presented enormous and real existential risks. We truly believe the path we’ve chosen presents the greatest potential upside.”
He was referring to the vanishing cash resources and rising losses from the magazine whose subscriptions revenue had declined from $284mn to $211mn during 1999-2009. Advertising was also falling precipitously. Inevitably, the NGS was becoming increasingly dependant on the TV channel launched with Fox in 2001.
The numbers since the controversial deal tell the story of the National Geographic Society itself, “freed” of the costs of digital and TV production and with assets swollen by the Fox payment in 2015:
| $mn National Geographic Society | 2021 | 2020 | 2019 | 2018 | 2017 |
| Revenue (% donations) | 204 (25%) | 71 (29%) | 105 (32%) | 131 (24%) | 188 (16%) |
| Net income | 63 | (75) | (73) | (30) | 40 |
| Grants paid | 19 | 25 | 19 | 30 | |
| Headcount | 539 | 481 | 606 | 601 | 695 |
| Net assets | $1.6bn | $1.7bn | $1.5bn | $1.4bn | $1.6bn |
The net assets (the endowment boosted by the Fox purchase price) underpin the society and have also been generating an investment income of tens of millions each year.
Interestingly, the NGS has incurred a deficit in three of the last five years reported. But the record $63mn surplus in 2021 may have been repeated in 2022 because of growing success in fundraising: donations totalled more than $100mn for the first time – 2x 2021. The way in which the Fox deal strengthened the balance sheet in 2015 is underlined by the fact that, the year before, the society had revenue of $540mn, a headcount more than double that of 2016, and a surplus of just $23mn.
The transformed finances all but silenced the critics and reassured members and the wider world that the JV would give it “the scale and reach to continue to fulfill our mission long into the future…as media organizations work to meet the increasing demand for high-quality storytelling across multiple platforms.”
But, from the start, there were tensions between the scientific and educational motivation of National Geographic and the commercial, mass market instincts of Fox which had led to the kind of sensational TV content (like “Locked Up Abroad” and “Rocket City Rednecks”) that would never appear in the magazine.
In 2019, as if to emphasise the bitter-sweet nature of what has been satirised as a Faustian pact between the illustrious global charity and a world-leading entertainment group, Fox sold its 73% of National Geographic Partners to Disney. It was part of the $71bn sale of much of 21st Century Fox. You could almost hear the sighs of relief from the National Geographic Society.
It seemed to be a dream result for Nat Geo which (they whispered) had escaped from the clutches of Fox: “We are thrilled about the opportunity that the JV will present for National Geographic to grow on a global scale. The launch of direct-to-consumer platform, Disney+, will be a major moment in the industry and it’s exciting that National Geographic will be part of it. We will also work closely with Hotstar in India.”
Mickey Mouse is more popular than Rupert Murdoch. But…
Media everywhere consistently over-does the idea of Faustian pacts in which people, companies, governments and even charities are accused of selling their souls to the ‘devil’. However, the Nat Geo deal with Fox makes a tempting case.
The straightforward justification was that Fox paid what seemed like a huge price for its 73% shareholding in National Geographic Partners. Let’s by-pass whether or not the society could have secured an even higher price at a slightly later time or with a formal auction process rather than a one2one deal.
It may be true that the Fox payout (now morphed into a fund of at least $1.6bn) guarantees the continuation of the society’s unique exploratory role almost indefinitely. It has also clearly enabled the society to ramp-up its fundraising simply because the investment income from the endowment now should be sufficient – over the longterm – to cover all the society’s fixed costs. As a result, NGS can appeal to would-be funders on the basis that 100% of all donations go straight to supporting its “explorers”. Last year’s fundraising record seems to demonstrate the effectiveness of this strategy.
That’s the easy bit.
The contrary view goes like this: The JV deal essentially identifies the NGS core mission as being “to illuminate and protect the wonder of our world”. But, in the 21st century, how can the society be sure of its ability to do this – without having control over its media and communications? How can you control only the exploration and discovery but not the communication and education which complete the virtuous circle?
It seems an odd idea, somehow besmirched by the NGS emphasis on the price paid. It’s almost as if the venerable society might itself have been sold – if only the price was right.
Whatever they say publicly, the good people at National Geographic have had plenty of reasons during the last eight years to feel uncomfortable about the whole idea of National Geographic Partners, the society’s role as a mere minority partner, and those reality-style programmes. They may also have felt uneasy about the way in which, first Fox and now Disney, have laid-off hundreds of longterm former NGS employees as part of the cutbacks in their wider TV businesses.
Someone, somewhere must once have warned them that differences of culture are most often the reasons for the failure of M&A. But it’s too late.
Just this month, Disney laid-off Yulia Boyle, the National Geographic vice president since 2008 who transferred to Disney as part of National Geographic Partners in 2015. She had been responsible for the international exploitation of the magazine and digital brand and had built the collaborative network of international editions (once more than 40). For many publishers and media companies around the world, Boyle has been the face of Nat Geo and a highly effective advocate of the JV with Disney. No more.
For a reminder of how Disney can control what is said in the name of the society, you need look no further than the National Geographic website. It is currently promoting the whole range of channels and programmes available on Disney+, including those of Pixar, Marvel and Star Wars – and not just Nat Geo itself. Closer to home, recent issues of the magazine have actually featured cover promotions for Disney+, complete with logo.
There are many reasons to believe that Disney is a more productive partner for National Geographic than Fox. The “House of Mouse” is, for example, heavily involved in important Nat Geo areas like travel and education and can – of course – be said to be a more family-friendly brand than the owner of Fox News. But that ‘integration’ also translates to the way the JV is managed, no longer as a single entity but as parts of individual operations across Disney. It’s a small detail but, if you want to advertise in National Geographic, you first get all kinds of information about the wide range of Disney media; they know what’s most important.
It’s easy to believe that future conflicts in this uneasy relationship might yet involve potential new Nat Geo business areas in which Disney is already operating. For example, it seems logical that National Geographic – with its huge outreach into schools globally – could operate its own online education courses, an obvious growth area. But Disney is already there – and some of its connections are even advertised on the Nat Geo site.
Just imagine if that 2015 announcement – instead of being about a JV – had involved the outright sale of all Nat Geo media, platforms and licensing. It would have seemed outrageous. But, when it comes to navigating the future of National Geographic, is the retention of a 23% minority shareholding really any safer than a (seemingly unthinkable) outright sale?
That’s a potent question in the season when Disney has been laying off thousands of employees in waves, with public messaging that has succeeded in reassuring investors but scaring employees.
The upheaval has only emphasised just how different are these two partners. One insider joked recently that, perhaps, the National Geographic Partners deal was a bit like, say, the Catholic Church securitising its future earnings by selling shares to a consumer goods manufacturer. Or a media company.
Having watched enough of the impressive Nat Geo output streamed on Disney+ and noted the large and growing youth audiences on social media, we wouldn’t go that far. These are high-quality media operations that can and do collaborate successfully. But Disney is a $170bn listed company in churning markets. National Geographic Partners is, in that sense, relatively small but has really only just begun. And digital media has a long way to go.
Time will tell whether one of the best-loved charities has sold its future or saved it. Just when the world needed it most.
