I asked Marty Peretz the other day whether his goal during the nearly four decades that he had owned The New Republic was ever to make a profit. "Absolutely not," he bellowed. "I think we were profitable maybe three or four years." One year, he said, the magazine's staff threw a pizza party to celebrate being in the black--"and the party put us back in the red." He was only half-joking.
No, Peretz owned The New Republic because it gave him a megaphone on issues he cared about, like Israel. Influence accrued to him, as did a certain social status that came with owning a magazine that mattered to the policy elites in Washington, D.C., and Cambridge, Massachusetts.
Strange as this may seem, this has long been the "business model" for policy and political magazines. Harper's Magazine is published by Rick MacArthur, and its losses are covered by the J. Roderick MacArthur Foundation. For years Mort Zuckerman, the real estate mogul, picked up The Atlantic's losses.
Peretz told me that during his tenure, The New Republic lost an annual sum in the low six figures, which he covered. So long as the losses were manageable, the owner would write a check. If the losses became too onerous, then the owner would look to sell.
Thus it was that in 2012, with The New Republic's losses rising to around $3 million, Peretz sold the magazine to Chris Hughes, who got rich by being one of the original executives at Facebook. (He was Mark Zuckerberg's roommate in college.) With a net worth said to be around $700 million, Hughes was in a position to subsidize his new toy for a very long time. "I told him that if he wanted to maintain a serious and substantial publication, he should look forward to losses for some years," Peretz said.
In the two years that Hughes has owned it, The New Republic regained its reputation for smart, lively, engaging journalism. But he also appears to have quickly tired of losing money. A few months ago, he hired a new chief executive, Guy Vidra, from Yahoo. Vidra immediately began using words like "disruption" and "innovation" and "breaking stuff" (though he didn't use the word "stuff"). The first time many New Republic staff members heard their company described as a "vertically integrated digital media company" was when Vidra made his first big presentation to the writers and editors. In an op-ed article that Hughes wrote in The Washington Post--after The New Republic's editor-in-chief and literary editor had resigned and most of the staff had walked out with them--he said that The New Republic could no longer be a "charity," and that his goal was to make it a "sustainable business." In other words, he wants to make a profit.
Not that there's anything wrong with that. It is just hard to see how he is going to get there.
The truth is, the jury is still out on the profit-making ability of digital publications. Slate, which has been around since 1996, makes money, but not much. The Atlantic under David Bradley, its current owner, has a terrific digital presence, not to mention 500,000 print subscribers. It also makes money. But, again, those profits are modest. Venture capitalists are throwing money at new online media ventures like Vox, but we are a long way from knowing whether they will ever be profitable. None of the digital media companies have gone public, so their profits or losses are hidden from view.
The New Republic, on the other hand, has a print circulation of around 42,000. Its current website is lively, but clearly it wasn't generating the number of clicks that its new owner wanted. Even before Vidra joined, The New Republic's business executives were trying to get the editors to do things that would attract more clicks. One executive suggested that Michael Kinsley--a former editor of the magazine himself--come up with a listicle, a la BuzzFeed. ("10 reasons why health care isn't a free market.")
Is it any wonder that the staff walked out when this plan was finally unveiled? Their earnest little magazine is the opposite of BuzzFeed. That's what they loved about it. Or at least it was.
When I spoke to Vidra last week, he stressed to me that The New Republic was not going to abandon its heritage of thoughtful journalism and provocative ideas. When I asked him whether he would follow the model of The Atlantic, he demurred. He instead suggested that Vox Media was a more appropriate model for what he had in mind.
After we spoke, I went to the Vox website. I scrolled down until I saw a headline that stopped me cold. "Everybody farts," it read. "But here are 9 surprising facts about flatulence you may not know."
Goodbye, New Republic.
Editorial on 12/12/2014