Yahoo Finance Hot Source: Barry Diller Spent Millions to Feed a Dying Beast
The Daily Beast was on track to lose $9 million this year and was “hours away” from being sold to private equity, according to its new CEO and publisher Ben Sherwood, who delivered the startling news to shell-shocked staffers during an all-hands call last week.
Sherwood and chief content and creative officer Joanna Coles took the reins of the website in April and have sought to cut the site’s losses with buyouts and layoffs. Around 30 people departed the publication last week, including senior editors and top reporters.
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“When we arrived in April, the company was set to lose $9 million this year,” Sherwood told staffers on Monday, according to an audio recording of the meeting obtained by Hot Source. “To put that differently, it was on track to spend $9 million more than the revenue it was bringing in. That’s $9 million in losses on top of many millions and millions of losses in previous years and even more losses, tens of millions, in projected years ahead.
“As you know, Barry Diller and IAC have always believed in the Beast and they’ve always funded it,” Sherwood continued. “For a variety of reasons, Diller and IAC decided they needed to make changes and as you probably heard or probably read, there was a plan to sell the Beast to private equity, which would have in turn laid off almost everybody at the company and run the business as a slow-wind-down operation. This almost happened. In fact, it was hours away from taking place.”
The fact that the Beast was losing money will come as no surprise, but the full extent of Barry Diller’s losses was unknown until now.
The enormity of those losses shocked veterans of the publication, including royal correspondent Tom Sykes. “That figure of $9 million losses — I have never heard that number and that is shocking. I knew the company wasn’t doing great, but I had no idea,” he said on the call. “I think that’s an astonishing, astonishing figure, and hats off to Barry for keeping it going and hats off to us for keeping us going.”
As Hot Source first reported, the new leadership has had a rocky start. D.C. bureau chief Martin Pengelly quit after just six weeks, owing to his frustration with Coles’ ideas. The publication now has only one reporter based in D.C. just months before the election and has been frantically trying to recruit political reporters.
“We are having conversations with people. I want to be respectful of those conversations. We are moving as fast as we can on that front,” new executive editor Hugh Dougherty told staff about their Washington recruitment efforts.
Sherwood said on the call that thanks to the cutbacks and buyouts, the Beast (where Hot Source worked from 2018-24) is now on track to break even next year and move into profitability in 2026. The former ABC exec told staffers they planned to bring on new hires in the coming months.
The site has been operating with the help of freelancers and contractors as it looks to recruit more journalists. “The overall crew will be smaller as the finances simply don’t support the size of the staff that we had before, but we are confident that we can bring in really smart people,” Coles said.
“It is about a culture of trust around the table where we have meetings, and we throw down ideas and where some of our ideas seem outrageous, but you throw out a big idea but you pull it in and other people start adding and you end up with a thoughtful, layered idea,” Coles, said on the call, and seemed to be alluding to a series of leaks that have centered around several of her unusual ideas.
Meantime, Sherwood has become one of the site’s bright new scribes, writing articles about the 100th birthday of the Caesar salad, tips for grilling the best July 4 hot dog and a first-person account of how he had witnessed an alleged “hate crime.”
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