Salon’s new owners say they see an easy path to profits for the troubled news publisher.
On May 8, Salon Media Group disclosed in a filing with the Securities and Exchange Commission that it had reached an agreement to sell Salon to a company belonging to Chris Richmond and Drew Schoentrup, the owners of monetization services firm Proper Media, for $5 million — a far cry from the $107 million the company was valued at when it went public in 1999. The SEC filing also revealed that Salon’s CEO, Jordan Hoffner, and CFO, Betsy Hambrecht, had been replaced with board member Richard MacWilliams and director Trevor Colhoun, stepping into those roles on an interim basis.
Salon has lost money consistently since its IPO, with few moments of profitability, according to a former senior exec and reports; when the company last filed quarterly earnings more than a year ago, Salon posted a loss of $696,000, on revenue of $1.25 million.
Yet its new owners, who first got to know Salon when Proper monetized Salon’s programmatic display inventory back in 2017, say they see an easy path toward profits — without cutting editorial at the small publisher, which now has fewer than 30 full-time employees, Richmond said. Richmond believes that his company Proper can slim Salon’s operating and technology expenses and win better rates for the site’s display inventory. He also sees a path toward adding consumer revenue, though the focus for the site will be on programmatic advertising.
TV Tropes, another site that Richmond and Schoentrup own, will handle Salon’s technology and product needs, while Proper Media, which handles monetization for sites ranging from Encyclopedia.com to Raw Story, takes care of monetization.
Over the past six months, Proper has been getting rid of services Salon wasn’t using, including a premium tier of Google Analytics, and trimming the number of third-party vendors Salon was using to run ads, Richmond said. Those moves helped cut Salon’s page load times to a third of their previous totals and reduced Salon’s hosting costs by “six figures,” Richmond said.
Richmond and Schoentrup will keep out of the editorial process. Over time, Salon’s back end will be rebuilt so editors can A/B test content to figure out what they should produce more of.
“Basically, our plan is to get more details,” Richmond said. “I want to make decisions based on data.”
Salon’s fire sale comes after many years of the publisher scrambling to turn its business around. Its efforts have included trying to expand into new content verticals such as food and science, aggregating more third-party content, investing in video during the Facebook boom and even returning to subscription revenue years after abandoning it. The constant pivoting from one initiative to another resulted in a lack of long-term focus and strategy that hampered the company, according to multiple former Salon staffers.
The pivots also led to a substantial drop in audience. Salon attracted 1.2 million unique users in April 2019, according to Comscore, down 84 percent from where it was two years ago; monthly uniques hovered in the ballpark of 2 million for most of 2018.
Salon first built its brand by focusing on provocative opinions and reporting on politics. It also distinguished itself by being one of the first digital-native publications to put up a paywall in 2001. At its peak in 2014, Salon had nearly 90,000 readers paying around $30 per year for a subscription, and it was briefly profitable in 2005, when its founding editor handed the reins to Joan Walsh.
But for the past decade, the site has been focused on scale. A pivot to Facebook, in pursuit of more readers, initially helped the company. In 2016, Salon was getting as much as one quarter of its traffic from Facebook. Then Facebook changed its algorithm to favor user posts over publisher content, and Salon’s site traffic began to plummet, falling below 10 million monthly uniques for the first time and hurting the programmatic ad business that the publisher was increasingly reliant on.
In another attempt to rebuild the audience, Salon leaned harder on aggregation, with content sourced from third-party sites. For instance, Salon entered into content-sharing partnerships through which it syndicated articles from dozens of sites and bloggers, including Food52 and The Conversation.
Salon’s wide coverage area also made it difficult for the publisher to build a loyal audience, which it might convert into paying customers; and as a small news publisher reliant on programmatic advertising, Salon struggled in an ad market that was increasingly dominated by Facebook and Google. This was a key reason why, entering this year, Salon was planning to return to subscriptions more than a decade after launching, then abandoning, its initial paywall. The new plan, first tested with an ad-free version of its mobile app a little over a year ago, would have delivered an ad-free version of Salon, plus eventually some exclusive content hidden behind a paywall.
Though Salon reporters are still given time to report large stories — a piece published last week, on the prevalence of sexual assault at Burning Man, took more than a year to report — former staffers say that the attempts to gather more traffic led to a general “dumbing down” of Salon’s coverage.
“It’s been this strange hodge-podge for a while,” the former senior staffer said. “Salon’s had so many lives. It’s beyond nine lives at this point. I think for many people who used to work there, it’s long since died.”
Note: The New York Post first reported that Chris Richmond and Drew Schoentrup are the owners of the company that has reached an agreement to acquire Salon. An earlier version of this story said Richmond and Schoentrup were named in the SEC filing.