New York (CNN Business)Billionaire Laurene Powell Jobs is offloading some of her investments in journalism as the pandemic decimates the media industry.
Powell Jobs’ philanthropic organization, Emerson Collective, has cut ties with Pop-Up Magazines Productions, which owns Pop-Up Magazine and California Sunday Magazine. The media company’s union revealed the news in a series of tweets Wednesday, adding that California Sunday will be “discontinuing online publication” and that 11 employees “were told they would be laid off.”
The news comes a few months after The Atlantic, of which Emerson Collective owns a majority stake, laid off nearly 70 employees. Back in June, California Sunday stopped printing its magazine after six years. Now, it will stop publishing online as well.
These developments have been met by backlash from journalists and media observers who are wondering why Powell Jobs, who Forbes estimated was worth $16.4 billion in April, is pulling back on her journalism investments in the middle of a global health crisis.
Powell Jobs founded Emerson Collective in 2004 to invest in nonprofits and other efforts such as voting rights and education. At The Information’s conference in September, Editor-In-Chief Jessica Lessin asked Powell Jobs why she invested in media companies, to which she responded by saying it wasn’t about making money.
“As you know, it’s really hard to find a vibrant business model for for-profit media, so our involvement in media is not to turn a profit. It’s an honor for me and my team to be associated with some of the greatest journalists,” Powell Jobs said.
The pandemic has decimated the revenue sources of media companies, leading to furloughs, pay cuts and job losses for tens of thousands of journalists. The inability to host in-person events in particular has hurt The Atlantic and Pop-Up Magazine, which rely on them financially. Pop-Up Magazine’s stories are told in front of a live audience with music and other multimedia components. When the pandemic hit, organizers announced that they would not be touring the country with a live performance in the spring.
When Emerson Collective acquired Pop-Up Magazine Productions in November 2018, Powell Jobs lauded the team for their “unique journalistic platforms that help foster empathy and better understanding in the world.”
In 2017, Emerson Collective had quietly invested at least $10 million in Pop-Up Magazine Productions, according to The New York Times. That same year, Emerson Collective announced to incredible fanfare that it was assuming a majority stake in The Atlantic. After laying off 68 staffers in May, The Atlantic announced a few months later that it added 325,000 new subscribers a year into introducing its paywall.
Wednesday’s statement from Emerson Collective and Pop-Up Magazine Productions, shared with CNN Business reads, “Emerson Collective and Pop-Up Magazine Productions are proud of their five-year partnership. We look forward to possible future collaborations as Pop-Up Magazine Productions enters this new phase as an independent company.”
Emerson Collective told CNN Business in a separate statement that the two had mutually agreed in August to go their separate ways. The agreement included what Emerson called a “substantial contribution” from them to “allow Pop-Up to operate independently and do so without oversight or control by Emerson Collective.”
god damn it i am sick to death of the richest people on earth toying with media over profit potential and then dropping it when it doesn't earn out https://t.co/6A1W0YMEte
It's absolutely unconscionable that Emerson Collective — run by a woman worth $19 billion — would drop them and the equally wonderful Pop-Up Magazine during a pandemic. Journalism needs help to survive this; short-term profits cannot be the only factor.
Anyway, I have a feeling that this will be an enduring question of the COVID-era.
How much is Marc Benioff prepared to lose at Time Magainze? Or Patrick Soon-Shong at the LA Times?
Billionaire media owners will have to navigate these contradictions.https://t.co/4JE0QbIKyo
Emerson Collective is not the only deep-pocketed backer seeking to dump its media investments this week. The Wall Street Journal reported Tuesday that Japan’s Uzabase is putting Quartz up for sale just two years after buying it.
Powell Jobs is among a group of wealthy billionaires who have bought legacy publications in recent years. Biotech billionaire Dr. Patrick Soon-Shiong took control of the Los Angeles Times in 2018. Salesforce CEO Marc Benioff bought Time.
Similar to Powell Jobs, Benioff has implied he isn’t in it for the money. Last year, Benioff told CNN’s Brian Stelter that he wanted the magazine to be “unshackled” from financial constraints. In March, Benioff pledged no layoffs for 90 days as other news organizations faced dramatic cutbacks.
On the other hand, Amazon CEO Jeff Bezos, who acquired The Washington Post in 2013, hasn’t shied from making cuts. Last September, The Post shut down its commuter paper, Express.
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