They say don’t shoot the messenger, but what if the messenger shoots himself?
Media startup The Messenger burst onto the scene last May with $50 million in hand, aggressively hiring journalists to build an “unbiased” digital newsroom. Instead, her staff found out via a New York Times article today that the publication is closing. According to employees’ social media postslaid off workers will not receive any severance pay and their health coverage will expire.
“The last thing I saw on Messenger slack was a panicked co-worker saying ‘wait what about our insurance coverage, I’m having surgery—’ and then we all walked out!!!” said journalist Jordan Hoffman in a post on X.
The journalism industry didn’t have a great year, in part because decline in digital ad sales in all areas. But Messenger’s collapse is shockingly dire, even at a time when 3,000 journalists have been laid off in the last year.
Founded by Jimmy Finkelstein (formerly owner of The Hollywood Reporter and The Hill), The Messenger had lost about $38 million on its seed capital and generated just $3 million by the end of last year, per The New York Times. At the launch, Finkelstein claimed the company would grow $100 million in revenue after the first year, but only lasted about nine months.
Messenger was trying to raise additional funds in the hours leading up to his death. But it failed to secure the funding it needed, which begs the question of why the publication needed to raise more money so soon, anyway.
“For the past several weeks, literally up until last night, we have exhausted every available option and attempted to raise sufficient funds to reach profitability,” Finkelstein wrote. “Unfortunately, we were unable to do so, which is why we have not shared the news with you until now. This is really the last thing I wanted and I am deeply sorry.”
Like nearly every other company that has made layoffs in recent years, Finkelstein cited vague “financial headwinds” in his memo to staff about the closings (which, we can’t stress enough, came after staff learned they were losing their jobs from a New York Times article). However, Finkelstein hasn’t addressed exactly how it’s possible to burn through so much money so quickly.
From the beginning, the media experts were skeptical of Messenger’s game plan, which was to leverage referral traffic on social media to generate ad revenue. This strategy for a media business may have worked 15 years ago, but this is not the era of BuzzFeed’s boom (just look at that company’s stock price). At launch, Nieman Lab noted that The Messenger ran a new story every two minutes, some of which were just one sentence. Although Finkelstein’s ambitions to build a large-scale, unbiased media engine were lofty, they were ultimately doomed to failure. Unfortunately, this failure means financial uncertainty and precarious health care coverage for its workers.
“I can’t fathom doing this to anyone” He wrote former Messenger executive Madeline Fitzgerald at X. “I don’t [know] why would you treat employees like this.’
