‘We have the simplest business in the world’: A conversation with Defector Media

In late 2019, writers at Deadspin, the sports website formerly owned by Gawker Media, quit en masse, partly to protest a mandate from the site’s new owner, a private equity firm, to “stick to sports.” In 2020, they reconvened to launch Defector Media, an employee-owned, subscription-only website. Defector is devoted to sports, but it is hardly stuck on them; rather, it engages with the deeper concerns of culture, labor, and politics that sports often prompt. 

In December, Keith Gessen, Delacorte Professor of Magazine Journalism at Columbia Journalism School, spoke with Barry Petchesky, deputy editor of Defector Media; Giri Nathan, staff writer; Lauren Theisen, engagement editor; and Jasper Wang, vice president of revenue and operations, who collectively explained the creation of Defector and how its unique business model works. Their conversation took place over Zoom; the transcript has been edited for length and clarity.

 

Keith Gessen: How did you get involved in sports journalism, and how did you get involved with Defector?

Barry Petchesky: I always wanted to be a sportswriter. I’d buy a newspaper on the subway every morning and just read the sports section back to front. But coming out of Columbia Journalism School, there were no jobs. It was 2007. It was the recession. So I took on an internship at a personal-finance magazine, which was almost the exact opposite of what I wanted to do. From there, I went to the New York Post—again, not what I would like to do—as a general cops and courts reporter. But that was a really good grounding for the sort of basic journalism that serves you well. I eventually left that for a fact-checking gig at ESPN The Magazine, which still existed at the time. Fact-checking was absolutely not what I wanted to do, but it was sports. It was closer.

While I was doing that, I started writing nights and weekends for Deadspin.com. I started bugging the editor, Will Leitch: “Hey, let me write for you. I can do this.” I sold him a few freelance pieces over the years, just to stay on his radar, and eventually got tapped to do nights and weekends part-time. That led to a full-time job. And then I clung to that with every fiber of my being for the next ten years or so, until private equity bought out the company and it all sort of fell down around our ears. But I’m sure we’ll get into that.

Giri Nathan: In college, I did a little bit of freelancing for local papers, and probably the years of my life that were most consumed by the internet were also the golden blog ages. So I was reading a lot, including a lot of Deadspin, and figured I wanted to get my foot in the door somewhere in media. After I graduated, I got a temp job fact-checking at Time magazine. It was very interesting to see how the sausage gets made, just going through and making sure that the central premise of a big feature actually held up under my scrutiny. After about a year and a half of fact-checking, I quit, and pretty soon after that saw a job posting at Deadspin.

Jasper Wang: I had no background in sports or journalism. I was a longtime management consultant at Bain & Company. But Deadspin was my favorite website. And so when things fell apart there, in the fall of 2019, I just cold-emailed a bunch of these folks who I knew were in the New York area. It was basically just “I’m so sorry this happened, and I’d love to buy you a beer, and if you’re thinking of doing something on your own, I’m a business guy who can be helpful.” We spent some time figuring out what this was, but I quit my job in June or July of 2020. And we announced Defector on July 28, 2020, and launched the site on September 10, 2020.

Lauren Theisen: I grew up in Michigan, was always a very obsessive sports fan, especially hockey, and I always wanted to write. And I always loved Deadspin too; I read it from when I was a teenager. Weirdly enough, we got the Sporting News at my house for a while, and Will Leitch had a column in there, and I somehow followed that to the website that he founded.  

But I never really thought about it too much as a career, sportswriting in particular, because the culture didn’t really seem to fit with me. I went to college in Ann Arbor and was writing a lot about music in metro Detroit. And I did that for about four years. And then, when I was twenty-one, I happened to be going to the USA–Mexico soccer game a couple days after the 2016 election, and I pitched a story about that to Deadspin. I wrote that story, and it went well. And then that sort of turned into an internship. And I ended up getting a job out of that internship. It was a dream job for a couple of years—and then it was kind of a nightmare job. So I quit with everyone else. I did a little bit of freelancing, worked at the New York Daily News doing really disposable stuff for about seven months, and then quit that to join up with Defector.

 

KG: So what happened to Deadspin? Walk us through it.

BP: [Deadspin] was one of the Gawker network sites, which up until 2016 were independent, run by an eccentric rich guy, Nick Denton. Then Gawker Media got sued out of existence by Hulk Hogan. You may or may not be familiar with this. The company was sold at a nice little discount to Univision, which saw this big audience and something that was relatively cheap, purchased it, but had no idea what to do with it. That lasted a couple of years, then they turned around and sold it to this private equity group, Great Hill Partners, which made very clear, without saying as much, that what they wanted was a cheap content mill that turned out lots of, like, low-quality, clickbait-y, SEO-bait-y sort of things.

This private equity group and the CEO installed their own little henchmen in all the positions of power, including some of the editorial positions. And one of the dictates we kept getting was that we were supposed to “stick to sports.” We often covered a lot of stuff that wasn’t sports-related, because we wanted to, and we thought our readers liked that. What we thought our readers liked about Deadspin was the writers, and the style of talking to you, and calling bullshit on stuff that’s bullshit when no one else will.

So we fought this “stick to sports” mandate at every turn, even though they thought that would be easier to sell to advertisers or whatever. And Megan Greenwell, the editor in chief that I was under, eventually quit her job. But those of us left behind didn’t go along. And one day, in the midst of all these crises that were happening every day, us battling with management, we decided to populate the site with a number of non-sports stories from our past—all very popular, of course.

I was called into the CEO’s office. The meeting lasted—let’s call it ten seconds. He told me to get the fuck out, and I was escorted out of the building that day. So I headed downstairs to the Planet Hollywood beneath our office and got a drink at the bar, and that was the last time I was in the office.

LT: We were all shocked when that happened, and we all sort of just followed [Barry] downstairs and into the Planet Hollywood. We strategized for several hours. I had a few harebrained schemes, in terms of what could possibly be done to save the site. After a couple of flimsy attempts at making it better, I think Tom Ley said that he was definitely going to quit. And I very quickly decided that I was going to quit too. And over the next couple of days, everyone else followed suit. And then it was gone.

 

Sohrob Nayebaziz / Defector Media

 

KG: Talk to me a little bit about how Defector began. What were some of the ideas? Was it always going to be exactly the way it looks now? 

JW: I think it’s worth talking about both the revenue model and the equity model. On the revenue model, what we knew we had was a very loyal audience. There was some talk of “should it be ad-supported still?” But then you’re making a bet on scale, like so many other media companies, which is sort of workable if you have the runway for it. But we looked at what our asset was—this loyal audience—and said, you know, the fastest way to make some money is just to ask them to pay directly for the content.

I mean, in some ways we have the simplest business in the world. We write stuff, it goes on the internet, and then people give us money to access those things. If you compare it to what everybody’s video ad-tech stack costs, in terms of dollars and effort to manage, we are very simple.

In terms of the equity model, we did go down the path of trying to raise a little bit of money from New York media venture capital firms, family funds—you know, interested rich people. We spent a couple of months kicking the tires at various places, and had some term sheets on the table. And then the pandemic hit and threw everything in turmoil, and that funding channel dried up. And so at that point, there was a reconsideration among the writers and editors. At that point, the current structure emerged: a worker cooperative. It’s 100 percent owned by the people who work here.

I think, had we launched with some VC money, we still would have done okay. I think people would have been happy to see the site. But I think, in that moment, in the middle of 2020, it was also something people could rally behind: the idea that this company was entirely bootstrapped and only owned by the twenty people whose names are on the site.

In twenty-four hours after we announced, we had 10,000 paid subscribers. We hit 30,000 within a couple weeks of actually writing stuff on the internet. We hit 40,000 a couple of months ago. Then we hit sort of a one-year renewal period, so we’re at about 37,000 paid subscribers now, and 95 percent of our revenue in our first full year came directly from subscribers.

 

KG: That’s amazing. What was the readership of Deadspin? Did you have a number for that? 

BP: Any given month would be somewhere between 10 and 20 million uniques. I guess uniques doesn’t speak to, like, the number of people who read every single post on the site, every single day…

JW: My understanding is something like 2 percent of the uniques drove 45 percent of all page views. So that is some 300- to 350,000 people who basically were spending all day on the site. And so the bet was: “Can we convert 10 percent of those?” That’s the business right there.

 

KG: I grew up in Boston. I had the Boston Globe sports section, which was a really good sports section, and had some really kind of voice-y writers. Leigh Montville was my favorite. But it was very local—you got your sports scores in the morning paper. It was before the internet. And then you had these national publications like Lauren mentioned: Sporting News was one, Sports Illustrated. And then this world obviously collapsed. And ESPN is part of that story, you know—when it went from being just kind of a TV network to being also a really popular website.

BP: Yeah, I grew up in the nineties, and it’s insane to think of now, but ESPN was the coolest thing alive. That was the Dan Patrick, Keith Olbermann, Stuart Scott, Rich Eisen years. It was the alternative to stuffy Sports Illustrated. And its popularity is where it might have gone wrong. I watched it become the mothership, or the Borg—just becoming so big and so unwieldy and so enmeshed with the interests it covers. In the span of ten years, it went from being considered alternative to being the place that can’t accurately and critically report on the things it should, because it’s a rights holder, it spends hundreds of millions of dollars to air just about every sport—and you’re not going to get the truth from a place like that.

Right when I joined up at Deadspin, Adam Schefter, the big NFL reporter at ESPN, was emailing the president of the Washington Football Team, sending him advance copies of stories he was doing and calling him: “How does this look, Mr. Editor?” That is being in bed with what you should be covering critically in a way that just makes good coverage fully untenable.

So I think Deadspin, when it launched, was a sort of small alternative to the former alternative.

 

KG: I want to ask about the worker-owned cooperative structure. Do people own different amounts of the company?

JW: The original nineteen cofounders split the equity evenly, so about 5 percent each. And then each subsequent employee, we have a pool where we grant equity shares at a smaller amount than the original cofounders.

 

KG: And you have ownership, but you also get a salary?

JW: Yes. We have total salary transparency at the company, so everybody knows exactly how many dollars everybody else makes. Our salary has three components. Every single person at the company makes the same base salary. So every two weeks when payroll gets processed, it’s very easy for me to review, because everybody just gets the same amount at the end of the quarter. We then look at the last quarter, look at the financials, and say, “What can we pay out towards the target salary?” So the staff writers and the editors have different salary bands with target salaries above the base salary. And every quarter we look back and say, “What can we distribute?” And we pay out towards the target salary. In the event that target salary gets 100 percent paid out, and we have excess funds to distribute, we distribute that as completely equal bonuses. We have not gotten to that point yet… you know, someday.

 

KG: If somebody is a part owner, one of the original nineteen, can they be fired?

JW: Yes. Tom Ley, who is our editor in chief, and myself, as the executives of the company—we can be fired with a two-thirds all-staff vote. Everybody else: It’s sort of like, for me, I run the business side, and then Tom leads the editorial side. We keep an eye on performance and are charged with having those conversations as necessary. So the answer is yes, you can be fired for not doing your job well.

 

KG: And if you get fired, do you keep your stake in the company, theoretically?

JW: Yes, there are any number of complicated bylaws about ride-along rights and drag-along rights, things like that. We spent quite a bit of time writing, like, “What happens if somebody dies? Where does that equity go?”

 

KG: Has this structure caused any complicated or annoying situations that you hadn’t anticipated?

JW: We squabble and we debate. It’s not like everything is perfectly smooth all the time. But there hasn’t been, as far as I can tell, an existential crisis about the structure.

BP: We’ve all worked with each other before. We know we’re all pretty reasonable people. Obviously, there are problems we could run into with unforeseen things. As we grow and hire new people, things could change. But you know, almost everyone at this damn site quit their job in solidarity when I got fired. Like, I trust these people to make decisions for the greater whole.

 

KG: Is sports journalism something that people are willing to pay for in a way that they might not pay for other things?

LT: I think people just pay for whatever they’re most passionate about, and sports is what a lot of people are passionate about.

GN: I think we were also in a pretty unusual position where, before a launch, we kind of had this captive audience, this little community that seemed to really relish being reunited in a comment section, because I think a lot of friendships really did develop among our readers and they enjoyed a back-and-forth with the writers.

 

KG: Okay, last question for me. Defector is a company and a website committed to thinking about social justice, and instantiating it right in your practices. And yet—and I say this as a person who consumes a ton of sports media, and is a big sports fan—there is a kind of tension with the subject matter, right?

GN: Yeah, I think there is. We probably are a watering hole for sports fans with some kind of base level of guilt about their level of interest. But I think the way that we do it in our jobs is at least being as adversarial as we can to the leagues and people making the influential decisions. You know, being honest about the tolls of, say, chronic traumatic encephalopathy in the National Football League, and being unflinching about that side of things.

BP: I think sports is a way to talk about everything that happens in the world. It’s labor, it’s race, it’s politics, it’s policing. But we’re also fans. And if we weren’t, we couldn’t just sit there and harangue you about the evils of sports, because you would dismiss us. But because it’s coming from a place where we’re honest that we’re fans, but we also recognize how fucked up so much of this stuff is, hopefully it comes across as genuine—a genuine want to make something that we love better because it’s not good enough.

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Caleb Pershan is a CJR fellow.