Alexandra Steigrad
Embattled news startup The Messenger is fighting for its life as co-founder and CEO Jimmy Finkelstein scrambles to secure funding this week to keep it afloat.
Bracing for the worst, employees are expected to learn their fate in the next 48 hours, according to insiders with knowledge.
“Hopes are not high in the newsroom,” said an insider. “It’s f-ing bananas.”
A well-placed source said Finkelstein is working to ink “multiple deals” that need to come through “ASAP” in order for the company to not shutter by week’s end.
A rep for The Messenger declined to comment.
Earlier this month, a group of conservative media and business executives led by Omeed Malik, a financier who backed Tucker Carlson’s new media venture, had proposed $30 million for a 51% stake in the news site, putting its valuation at $60 million.
At the time, media critics balked at the valuation given The Messenger’s meager web traffic and dire financials.
The deal — which would include funding from Garrett Ventry, a Republican political operative, Ryan Coyne, founder of digital media agency Starboard; and George Farmer, the former CEO of Parler who sits on the board of Britain’s conservative news network GB News — would require Finkelstein to give up control.
The Messenger, which launched with $50 million in May, had big dreams to become a major centrist news outlet that would include hiring around 550 journalists and generating over $100 million in revenue in 2024.
Earlier this month, The Messenger shot down reports that it was considering shutting down over cash shortfalls.
Nevertheless, sources told The Post that the site lured in just 12.5 million unique visitors in November — which is far less than the 100 million monthly readers and $100 million in revenue that Richard Beckman, the site’s recently departed president, told the New York Times last March.
In October, Beckman — an exec known for aggressively drumming up advertising revenue, had sounded the alarm bells to employees that the site was running out of money. Earlier this month, he stepped down, with sources telling The Post he did “not see eye to eye” with Finkelstein on the direction of the business.
The company wound up hiring a staff of 300 people, but recently laid off two-dozen employees to stem costs, as it ended 2023 with a net loss of $43 million, according to leaked pitch deck recently obtained by CNBC.
The documents disclosed that the site took in $2 million in direct ads and $1.8 million in programmatic advertising last year. Most of the company’s quick cash burn has been linked to spending $39 million on hiring, the documents said.
Other expenses included over $240,000 a month in rent for offices in New York, Washington DC and West Palm Beach, Florida, with expenses related to travel, meals and entertainment ballooning to more than $1.7 million by the end of 2024.
They also revealed that without additional investment, The Messenger predicts its ending cash balance by June will be negative $16 million.
The Messenger has had a bumpy ride in its short-lived existence.
After the site launched, journalists began fleeing the Messenger, griping that they joined the site to do original reporting but that they were mostly aggregating clickbait news stories in order to drum up traffic for ad dollars.
The site’s journalists also have chafed over Finkelstein’s close relationship with Donald Trump, questioning a directive from editors to take down stories on the former president’s civil fraud trial in New York so as to not overwhelm the homepage, Semafor reported.
This post was originally posted by New York Post
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