Deadspin's Debacle: When private equity, publications clash
Deadspin, an online sports publication known primarily for its unconventional coverage of elite American sports leagues, has recently been purchased by a private equity firm, Great Hill Partners L.P., which solidified the editorial vision of the company with an "all-sports" mandate.
This act is not out of the ordinary: A private equity is summoned when a company is dealing with financial problems. In essence, the private equity firm’s role is to fund the company — to bring money to the table — and redirect the company to make a profit, so that the mission of the company can be carried out successfully.
The firm invests in a company because it believes in that company, it believes in its cause, hence the investment. A private equity firm wants to make money, not lose money — so, why would it not have the best interests at heart of the company it invests into?
That being said, Deadspin employees saw private equity as their doom, not their hero.
Employees, especially of whom were present prior to the change in owners of Deadspin, see the change as a negative alteration to the editorial vision and did not restrain in their criticism, despite the fact that the online publication concentrated on sports from the very beginning. Thus, the all-sports mandate should not have been much of a turn away from the original concentration of the site. Additionally, this mandate is quite broad.
It does restrain writers from only reporting game statistics so to speak, but writers could expand that mandate into politics, pop culture and other themes relating to sports. Moreover, “the data show that non-sports content brings more traffic and more revenue opportunities,” said Megan Greenwell, former Deadspin editor-in-chief.
But, there’s a caveat. Data is highly subjective, it matters the time the data was taken, where it originated, what was excluded from the findings, etc.— the numbers can be skewed. Furthermore, one employee in particular seized this opportunity to resound their opinion toward private-equity firms and billionaires generally, dubbing them “vultures” and “capricious.”
On a lighter note, the ex-Deadspin employee goes on to criticize a dress code of all things that had been recently established. How offensive in a place of business to be dressed appropriately, who could imagine such horror?
To address the general example of issues brought forth by an ex-Deadspin employee, there are bad apples in any sector of business or even private life — there will be corruption, there will always be someone who doesn’t have a company's best interest at heart and there will always be someone who doesn’t understand the particulars of a specific business.
Nonetheless, this does not warrant hateful speech toward billionaires, private equity, etc.
Publications attaining new owners and tweaking the editorial vision of the company do not warrant restrictions toward who can and can not buy a particular business. It is true that having the funds to invest in a company isn’t all it takes to see to it that a company succeeds, but, that transaction is between private entities and it should remain that way.
Once a company is purchased, it is in the hands of that firm, whoever is the new owner — they decide the company's fate. In this scenario, private equity (PE) is made to embody attributes of a villain, one who is immoral and anti-journalistic. Many refuse to see PE for what it is.
In essence, PE serves to increase efficiency, to increase a company's value and to create a thriving business, not to destroy jobs and pillage businesses. The goal is to create a profit, as a PE firm makes money when it sells its investment stakes.
It makes no logical sense to run an acquired company into the ground — what’s best for the company is what’s best for them, what’s best for that particular PE firm. Additionally, a PE firm would not be summoned if the company was financially stable in the first place. A stable company requires no outside investment.
In this sense, Great Hill Partners L.P. is giving Deadspin another chance at success. Thus, despite the few bad apples as discussed, why would a PE firm act in a manner which would lose it money — why would it jeopardize a company it has a stake in?
Media outlets do continue to need outside investment, but one just has to hope that whoever is in charge knows what they are doing and buys the company for the right reasons — that they believe in that company and will do what is best for the company.
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