5 New Details That Affect G/O Media’s Purchase of Quartz

G/O Media announced Thursday morning that it had acquired the business publisher Quartz, beginning a new chapter for both media companies and inviting a host of questions about the compatibility of the two organizations. On paper, the pairing makes some sense: As the media industry consolidates, publishers large and small will continue to gravitate toward one another in hopes of shoring up their respective weaknesses. G/O Media, whose house of brands spans a variety of categories, found an analysis-oriented business publisher looking for an exit. Quartz, whose overall revenue had declined despite an otherwise booming ad market, needed a safe harbor flush with resources. Still, despite these natural alignments, the two companies will need to navigate a number of unaddressed questions and points of friction for the merger to move forward smoothly. Below are five new details from the deal that could have an impact on its success. Return-to-office woes As part of G/O Media, Quartz staffers will be subject to its remote work policy following a transition period, chief executive Zach Seward confirmed. As a result, Quartz employees in New York, Los Angeles and Chicago will be required to work in the office all but six days a month. Quartz staffers not living in those cities will be able to continue working remotely. In December, G/O Media faced pushback from the staff at one of its properties, The AV Club, when it announced that its staffers would need to relocate from Chicago to Los Angeles to keep their jobs. Ultimately, seven employees left the company. Quartz, which is a fully distributed operation, could find itself navigating similar points of friction as remote workers now find that their level of workplace flexibility has decreased. Employee-owned no more Unlike many media companies, when Quartz returned to private ownership in November 2020, its staff received shares of company stock. The tactic, common among start-up organizations, encouraged talent to stick around until the company undergoes an exit event, such as an acquisition or public debut. As part of its acquisition, 80 Quartz employees became eligible to receive a buy-out bonus, drawn from a pool of just above $1 million in funds generated by its sale, according to people with knowledge of the matter. That breaks down to roughly $12,500 per person. The bonus was contingent on a number of factors that the people declined to discuss, citing legal precautions, but it aims to serve as remuneration for the staffers’ stock options. However, with their payouts in hand and their stake in the company dissolved, Quartz employees will be less incentivized to remain with the company. A clash of cultures G/O Media has attracted a number of critical headlines in the course of its three-year tenure, including claims of mismanagement and opaque communications, that have led to staff departures. Quartz employees are aware of these criticisms, and Seward has addressed them internally. But beyond the worries of managerial oversight, some Quartz staff worry that the two media companies approach their subject matter from markedly different perspectives, a source close to the matter told Adweek. The Gawker spirit that runs through G/O Media gives its reporting an adversarial, almost confrontational tone that can run counter to the particular brand of professionalism that defines Quartz. “I hope that G/O respects the very strong company culture that we have at Quartz,” said the staffer. “And lets us do what we do best.” Merging pains As Quartz and G/O Media combine, the two parties will need to address questions surrounding the merger of the two companies’ unions, as well as the fate of the Quartz website. In March, the G/O Media union, represented by WGA East, ratified a new, three-year contract with management, bringing to an end a five-day collective strike. Quartz has its own union, organized under the New York Guild. How the two will merge, and which provisions will apply, remains to be seen. In addition, Quartz has long prided itself on the high-touch design of its website, including proprietary products like its Guides and Obsessions. The business publisher will be adopting the G/O Media content management system, called Kinja, but conversations have yet to conclude regarding whether the Quartz site will retain its style or adopt the layout of the G/O websites. The publisher did confirm that its decision earlier this month to remove its paywall was unrelated to the acquisition effort. The layoff-free acquisition In choosing between suitors for Quartz, G/O Media stood out because it agreed to a merger that would require no layoffs from any department, Seward said. G/O Media was in a position to extend such an offer because the publisher recently raised capital in hopes of making acquisitions and expanding its headcount. The fortuitous arrangement––Quartz operating as a package deal while G/O Media looked for talent––helped lay the groundwork for what both parties claim will be an entirely bloodless transition. However, given the economics of the deal––Quartz lost $6 million in 2021––it strains credulity to believe that G/O Media will not look to trim expenses in some way, said media analyst Brian Morrissey. “You can save some money by consolidating operations, but ultimately you have to fill a $6 million gap,” Morrissey said. “You can generate more revenue through ad demand, and maybe subscriptions, but the other lever is cutting costs.”

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5 New Details That Could Affect G/O Media’s Acquisition of Quartz

A clash over remote work policies could be on the horizon

Mark Stenberg

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Mark Stenberg