Troubled digital media startup The Messenger will shut down operations less than a year after its much-ballyhooed launch, suddenly leaving nearly 300 employees out of a job, a source with knowledge told The Daily Beast.
In an email sent to staff on Wednesday afternoon, owner Jimmy Finkelstein said he was “personally devastated” to announce that The Messenger would be shutting down “effective immediately.” He added that he had “exhausted every option available” to secure enough funding to keep the site up.
“The industry has faced extraordinary challenges this past year,” Finkelstein added. “The economic headwinds have left many media companies fighting for survival. Unfortunately, as a new company, we encountered even more significant challenges than others and could not survive those headwinds.”
The New York Times was first to report the news on Wednesday.
Several sources told The Daily Beast that in the immediate moments after the news was first reported by the Times, employees still had not been informed that The Messenger was shutting down.
“I am not in the loop. Trying to find out now,” editor-in-chief Dan Wakeford wrote in the site’s general Slack at 3:57 p.m. ET.
Moments after that message was sent, sources added, the site’s Slack was taken down.
Meanwhile, the newly laid-off workers took to social media to vent about the haphazard way they found out they were now out of a job.
“All I know is that if I were to launch a media start-up I’d be sure to rent an entire floor of a downtown Manhattan skyscraper that was 9/10ths empty all day… and then fail to tell my employees they were laid off until they read about it in the New York Times,” critic Jordan Hoffman tweeted.
Additionally, employees publicly noted that media reporters had gotten the email Finkelstein sent out announcing the site’s extinction before many of them had.
Furthermore, as staffers noted online, The Messenger has no plans to provide any severance to impacted employees, and their health insurance benefits will also cease.
“Our HR team will follow up with everyone over the next few days,” Finkelstein wrote in his send-off email. “We understand this announcement will immediately raise several questions, and our team is committed to providing timely information during the period.”
Meanwhile, after acknowledging the site was closing, management sent employees an FAQ document on what they should expect moving forward.
Besides explaining that all employees had been terminated and would receive no severance packages, the document also noted that final paychecks had already been handed out. Email accounts will also be deactivated by the end of Wednesday, and employees need to return any company-owned equipment to The Messenger’s New York offices.
The shuttering of the “centrist” nonpartisan news outlet comes after owner Jimmy Finkelstein spent the past few weeks hustling for cash to keep the site up and running. The push for more funds and investors followed the revelations earlier this month that The Messenger had only “weeks” to live and was down to its last $1.8 million.
The announcement that The Messenger is no more puts a final coda on the site’s tumultuous nine-month run, which was beset by questions over its antiquated business model, executives fleeing due to clashes with Finkelstein’s handpicked president, journalists quitting over the site’s reliance on clickbait aggregation, and employee dissatisfaction with management’s lack of communication. Not to mention, of course, the company’s disastrous inability to draw revenue.
The Messenger’s death comes during an extremely dire period for mainstream media in general. Following severe payroll cuts last year across the industry, 2024 began with a veritable bloodbath as roughly a dozen news outlets and media companies announced drastic layoffs.
In the past few days, Messenger staffers grew increasingly incensed over the silence they’d been met with as the day of reckoning drew near. With management telling them last week that they’d soon be updated about the future of the company and Finkelstein expressing optimism that his fundraising efforts would prove successful, employees began grumbling on the site’s general Slack when no information was immediately provided.
Ahead of Wednesday’s announcement, staffers livid over the sustained lack of communication began to wave their pitchforks on Slack. Fully expecting massive layoffs or a full shuttering of the site, some employees wrote that they had already been paid out for their remaining vacation days despite no official missive being handed down by management yet. Others said they’d actually received an extra paycheck this week, compounding fears that job losses were on their way.
Initially billing The Messenger as a “WaPo-Daily Mail hybrid,” Finkelstein boasted last year that he had raised $50 million to start the site, as a platform that would cover politics, pop culture and general news through an “unbiased” lens. Finkelstein, who built The Hill into a D.C.-based media juggernaut before selling it for $130 million in 2021, also seemed determined to follow many of the same business practices that helped boost The Hill’s profile in the 2010s.
“This is unethical and the antithesis of a supposed ‘unbiased’ news site.”
— A ‘Messenger’ editor during a controversy with the owner
Despite the landscape of digital media dramatically shifting over the past decade and online advertising revenue dropping precipitously in recent years, Finkelstein indicated that The Messenger would rely largely on low-paying programmatic ads to become a profitable business.
Alongside president Richard Beckman and editor-in-chief Dan Wakeford, Finkelstein made far-fetched promises about the site’s potential to bring in massive traffic and eye-popping revenues. In a splashy New York Times profile just ahead of The Messenger’s launch last spring, the pair claimed that by the end of 2024, the company would bring in $100 million annually and average over 100 million hits a month.
In order to make this vision come true, Finkelstein said he would be bringing on hundreds of employees to fill the newsroom. After initially bringing on 150 journalists, the plan was to soon build up to 550 staffers across the company. However, the hiring eventually stalled out at 300 employees as it soon became clear that The Messenger was dealing with a full-blown financial crisis.
Lack of communication with the staff prompted complaints from reporters, who openly demanded that Wakeford and management hold a town hall to address their growing concerns, only to be met with deaf ears. The site’s employees grew increasingly outspoken on the company’s general Slack channel about the need for an all-hands meeting.
At the same time, Beckman seemed to live up to his nickname “Mad Dog,” which he earned for his brutish management style at Conde Nast. Within months of the launch, clashes with Beckman spurred several company executives to pack up and leave.
Meanwhile, journalists quickly became fed up with the site’s emphasis on flooding the zone with aggregated news stories and sensationalized headlines. Several editors quit within days of the site’s launch over their objections to the editorial direction.
It wasn’t just the over-reliance on clickbait that raised the ire of many reporters and editors at The Messenger. Late last year, for instance, Finkelstein—who considers former President Donald Trump a friend—issued an editorial directive: No more stories about Trump’s civil fraud trial on the site’s homepage.
“Finkelstein made far-fetched promises about the site’s potential to bring in massive traffic and eye-popping revenues.”
“[I] understand the message, and will adhere, but [I] want to be perfectly clear that this is unethical and the antithesis of a supposed ‘unbiased’ news site,” one editor said at the time. Homepage editor Lisa Letostak, who was fired in December, wondered if it was because Finkelstein “doesn’t want bad press” for Trump. While Finkelstein has said that his order was misunderstood, Letostak told The Washington Post that “Messenger readers, staff and investors deserve to know how Jimmy Finkelstein has influenced editorial decisions.”
Meanwhile, over the fall, Beckman began telling employees The Messenger was “out of money” and job cuts could soon be coming. Earlier this month, Beckman announced he was leaving as president due to “health issues.” This all came as The Messenger acknowledged that roughly two dozen employees would be terminated amid “dwindling” reserves. In the wake of Beckman’s departure, sources told The Daily Beast there was only enough money to keep the place going for “weeks, not months.”
Semafor first reported that The Messenger’s board of directors weighed shutting down the publication just before the new year. At the meeting, Finkelstein also expressed a willingness to sell the company while discussing the grim state of the site’s finances.
In the ensuing weeks, it became clear just how dire a situation The Messenger found itself in. A group of conservative investors—including the moneyman behind ex-Fox News star Tucker Carlson’s latest venture—expressed interest in buying a majority stake in the company. However, the sale to the right-wing conglomerate of investors was likely never going to happen, The Daily Beast learned, due to The Messenger’s politics team vociferously objecting to it.
It was also reported that despite the promises of revenue pouring into the site’s coffers, The Messenger only earned $3 million in 2023.
Finkelstein, however, continued to pitch potential investors this month about The Messenger’s sky-high potential in the coming year. Desperate for a large cash infusion to keep his site alive, According to CNBC, The Messenger’s investor deck forecasted advertising revenue to exponentially surge to $55 million and claimed that the company would be profitable by the end of the year. Furthermore, the company said it would reverse the layoffs and hire nearly 20 new employees to launch The Messenger TV, claiming the new video content platform would bring in millions in advertising.
All the while, much of the internal finger-pointing over the cash burn and reckless spending has been directed at Beckman. Insiders told The Daily Beast that he was largely responsible for the site’s overzealous spending, which harkened back to his Condé Nast days. This included, among other things, expensive office leases across the country and at least $100,000 to stock up the offices with snacks, sources said.
In the end, this should have been all so predictable. Before officially launching, The Messenger announced that it had acquired Grid, another well-financed media startup that failed to find a wide audience in its year of operation—with its investors eventually growing restless over the lack of progress.
Additional reporting by Andrew Kirell.
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