the audit

AllThingsD and the limits of the personal franchise news model

A few breakout stars don't signal a general power shift in journalism
September 24, 2013

A couple of weeks ago, Felix Salmon asked:

“Can Rupert Murdoch hold on to Kara Swisher?”

Well, now we have our answer. He doesn’t want to, at least at whatever price she was asking.

Last week, Dow Jones, a unit in Murdoch’s News Corp.’s empire, said it would not renew its contract with either Swisher or her partner, Walt Mossberg, founders of the very successful technology site and conferencing operation, AllThingsD.

This split had been brewing for a while. In February, Reuters reported that the AllThingsD team was in talks with Dow Jones to either extend or end the relationship. In August, Fortune reported that the AllThingsD team had hired an investment bank to find outside investors in case the talks didn’t work out.

The leaks accelerated discussion of what Jay Rosen correctly identified as “the rise of the personal franchise site in news”—journalists who once would have been thought of merely as stars working for large news organizations now believed to be franchises in and of the themselves. Rosen included AllThingsD, along with Andrew Ross Sorkin’s Dealbook at the Times, Wonkblog, built around Ezra Klein at The Washington Post, Nate Silver’s Fivethirtyeight, late of the Times now at ESPN, MMQB, starring Peter King at Sports Illustrated, and Grantland, built around Bill Simmons, also at ESPN.

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There are others, but not that many.

These new franchise raise the important question of whether and by how much power is shifting in journalism from publishers to authors.

I’d argue that these franchises are to a large extent sui generis and not indicative of a generalized power shift in journalism. In fact their high visibility tends to distort our view of the author-publisher, that is to say, labor-management, power balance.

First, it’s important to note that these particular franchises were (for the most part) all nurtured within big, traditional news organizations, which provided salaries, health insurance, tech support, legal backup, etc. etc., plus and importantly the imprimatur of their brand names built up over decades. So these are not autonomous operations, but in fact highly dependent ones.

It’s significant, for instance, that when Nate Silver moved his Fivethirtyeight franchise in July (which prompted Jay’s post), it wasn’t to go off on his own but to join another big company, in this case, Disney. In that sense, his move wasn’t so different from past jumps by media stars such, as, say, in 1984 when Mike Royko left the Sun-Times after Murdoch bought it and joined the Tribune. True, Silver was already a success before he went to the Times in 2010—he was on one of Time‘s most influential of 2009. But the Times‘s perch certainly helped to propel him to new prominence, and his next destination, even if it’s not his last, turns out to be within the MSM.

People wonder if Andrew Ross Sorkin will ever make his DealBook independent. Not only is there no sign of that, in order to expand his influence, he took a second job at another MSM outlet.

True, there are independents out there—Talking Points Memo and Andrew Sullivan are usually mentioned. But in fact they’re the exceptions that prove the rule. Matthew Hindman’s The Myth of Digital Democracy brings copious data to demonstrate the degree to which a few in the blog space, mostly early movers, like Sullivan and Kos, tend to lock up and continue to dominate traffic in a particular subject area (Hindman studied political blogs). The vast majority of other entrants get very little attention, leaving what Hindman calls the “missing middle”; In part because the architecture of the Web and of search, there just aren’t many mid-sized competitors.

As in the larger economy, there is a winner-take-all aspect to this personal franchise phenomenon. Think Amanda Palmer, a rare case of an artist who made tons of money to fund a new album. A lot of people can now perform, but only a few reap substantial rewards.

And that’s the larger point. The brightness of this new constellation of stars is a bit blinding. Their presence seems to point to a new era of reporter empowerment—if they can do it anyone can, or so the thinking goes.

Maybe so, but the phenomenon comes against a general backdrop for journalism that is less than empowering. Professional newspaper employment, for one thing, has fallen down and can’t get up. Indeed, it’s still falling. What’s more, many of the rank-and-file still working do so under ramped-up productivity requirements and generally disempowered working conditions. Just last week, my old paper, the Providence Journal, announced another 30 job cuts off of an already-desiccated newsroom, what the local Guild president, John Hill, calls, naturally enough, a “morale-killer.”

It’s just important to remember that the personal franchise phenomenon is not necessarily a harbinger for journalists or journalism generally. The opposite is probably true.

And what of the prospects of AllThingsD? The high-stakes standoff with News Corp. led to some information leaking out that puts the site’s finances in perspective.

As Bloomberg reported:

Tickets to AllThingsD’s most recent conference, at the end of May, cost $5,500 each, for a total of $2.75 million. The event also takes sponsors — such as Oracle Corp. (ORCL) and Sony Corp. — which pay as much as $400,000 each, adding up to more revenue than ticket sales generate, according to two people with direct knowledge of the business.

The website only brings in about $3 million to $4 million in annual ad revenue, most of it tied to deals that also run across Dow Jones’s other sites, such as, one of the people said. As a stand-alone entity, would generate about $1 million a year, the person said.

Bloomberg is asking us to trust it that these are not News Corp. sources out to bag AllThingsD (if they are, shame on Bloomberg).

Now, roughly $6.5 million in (minimum, including sponsorships) annual revenue is nothing to sneeze at—at all.

But remember, when thinking about wider applicability of this case, this is the tech sector, where money is practically flowing in the streets. Few other niches are this rich.

And the negotiations of the last few months turned into what might be thought of as the site’s first market test. That market was Rupert Murdoch, and he passed on the deal. Now, Murdoch is not always right. And he has an almost irrational belief that journalists are effete snobs who must be kept in their place.

But on the other hand, whatever else he is, Murdoch is one of the great value-creators among media titans of his generation. His valuation of media properties should be given some weight. And, as Sharon Waxman puts it so delicately, Mossberg and Swisher got “kicked to the curb.” (Waxman makes them out to be some kind of victims, but I don’t think anyone really believes that.)

For now, Dow Jones is promising to ramp up its technology coverage as well as its technology conferencing business.

Meanwhile, Swisher and Mossberg are left to issue plucky blog posts while they finalize a deal to bring in new backers and a new structure.

At this point, they are in the position of Jerry Maguire dialing technology leaders to stay with them, while Dow Jones plays Bob Sugar doing the same, perhaps murmuring, “It’s not ‘show friends’, it’s ‘show business.’ “

We’ll know more about how all this turns out in January when Swisher and Mossberg launch their new business, under a new name. Personally, I hope they make it and leave Murdoch and Dow Jones in the dust. Their success would add more proof that not only can (the most successful) individual journalists build sustainable franchises, they can go it alone

And something tells me they’ll do just fine.

But even if they do, and that’s still in doubt, the AllThingsD case isn’t really a model for anything.

Dean Starkman Dean Starkman runs The Audit, CJR’s business section, and is the author of The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.