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Updated Jan 3, 2024, 3:22pm EST
mediaNorth America

The Messenger’s board weighed shutting it down over cash shortfalls: sources

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The Scoop

The board of the startup news organization The Messenger weighed shutting the publication down at a meeting on Friday, after learning that the company is on track to run out of cash at the end of January.

The New York Times earlier reported Wednesday that The Messenger, launched last May as a politically centrist, wide-ranging bid for big web traffic and advertising dollars, is laying off nearly two dozen staffers out of a total of around 300.

Four people briefed on the meeting told Semafor that on Friday, The Messenger summoned its board members to a meeting to debate the future of the news organization. Founder Jimmy Finkelstein and the company’s board discussed the dire state of the company’s finances: At the time, the organization only had enough money to last several more weeks, and would need to make steep cuts and secure additional funding to survive. Two people with knowledge of the details of the meeting also told Semafor that The Messenger could shut down altogether, and that Finkelstein had also expressed a willingness to sell the organization.

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A spokesperson for The Messenger rejected the notion that it was in immediate peril, saying that the company had “already secured investment as part of our second raise, and so the notion of us discussing closure is beyond absurd.” The spokesperson did not elaborate on the source of The Messenger’s additional funding.

On Wednesday, The Messenger announced instead that it would implement layoffs following the Times report that its cash reserves were ”dwindling.” The company’s president Richard Beckman also announced in a LinkedIn post this week that he was leaving the organization at the end of the month.

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Max’s view

The Messenger launched last year, aiming to win over online news consumers with a rapid and voluminous publishing pace, scoops, and a rigidly nonpartisan ideological orientation. It has lived up to some of its initial promises, breaking stories about New York City Mayor Eric Adams, Jeffrey Epstein, and the 2024 presidential campaign. It has also succeeded in quickly building an online audience largely from scratch: Finkelstein announced internally at the end of last year that the publication exceeded 77 million page views in November.

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But as the publication’s cash flow problems suggest, it has struggled to translate those audience metrics into business success. The Messenger has quickly burned through much of the $50 million it raised last year, and is now scrambling to secure a buyer or additional funding. While Beckman clashed with staff and garnered negative media coverage, his abrupt exit coupled with the departure of Chief Revenue Officer Mia Libby last fall also do not bode well for the company’s ability to generate revenue to keep it afloat. Beckman told The New York Times last year that he planned to generate $100 million in revenue this year primarily through advertising and events, though The Messenger has held just one event since launching in May. Wednesday’s cuts are also an acknowledgement that it fell well short of its plan to have 550 journalists this year.

In the meantime, The Messenger is now heading into an election year with deep cuts to its political reporting staff, and has slashed reporters and editors from other key verticals that had helped it quickly build an audience.

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Notable

  • There have been some editorial tensions within The Messenger over political bias and its coverage of former President Donald Trump. Semafor reported last month that during Donald Trump’s civil fraud trial in New York in November, there was a back-and-forth over how prominently to display stories about his indictment on the publication’s homepage.
  • The Messenger has pursued an audience growth strategy that has largely tried to avoid having a point of view in favor of chasing traffic. “If you understand that platforms come and go, and that your primary responsibility is to provide your reader with interesting, engaging, and accessible information regardless of where they happen to be, then you will always be one step ahead of those forces that are beyond your control,” Chief Growth Officer Neetzan Zimmerman told Semafor in an email last year.

An earlier version of this article indicated The Messenger had hired 300 people in its newsroom, rather than at the company overall. The language has been updated.

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