Blogonomics: The Gothamist sale
Gawker and Gothamist were both started in 2003, and both grew to become big blogs; it’s interesting, now Gothamist is being sold to Rainbow Media, to see Gawker’s Nick Denton’s weird attempt to downplay the achievement of Jake Dobkin and Jen Chung.
Let’s say Jake and Jen end up with $1.5m each. That sounds like a lot; but they’ve been at the job seven years. And my understanding is that the contract would require them to stick around for another three, making a decade in total.
So that works out as about $150,000 per year — plus any compensation under the employment agreement they get from Cablevision.
Not bad — but still better to be even a junior analyst at Goldman Sachs or a fancy Moveable Type consultant. And you don’t have to work for the Dolans.
For one thing, I think that Jake and Jen are going to end up with more than $1.5m each, although the terms won’t be made public so we likely won’t ever know for sure. I don’t think either of them has been racking up debts along the way, so this is genuinely life-changing I’m-a-millionaire windfall money we’re talking about here, not a salary dribbled out over the course of a decade.
What’s more, it’s worth remembering how much Denton pays his bloggers. In 2003, when he launched Gawker, he paid editor Elizabeth Spiers $1,000 a month. Even today, now that he’s fully-fledged media mogul making millions of dollars himself, I still don’t think that any of his bloggers makes $150k a year.* And very few people can blog for Denton for more than a couple of years at a stretch. So Jen Chung, the editorial-side half of the Gothamist team, turns out to have made an extremely good decision indeed when she decided to stick with Gothamist equity rather than taking a better-paid editorial gig elsewhere — especially considering what’s happened to thousands of well-paid journalists in the past few years.
And Denton’s math is off, too: while Jake and Jen might not have paid themselves much at the beginning, they did start drawing a salary eventually. And going forwards, I think it’s safe to say that Rainbow Media is going to pay them substantially more than $150k/year, and not just for the next three years, either. Rainbow is acquiring talent here, especially Jen’s, and it’s going to want to keep her and her family happy and well fed for the foreseeable future, well past three years, if it possibly can. Rainbow Media is not something the Dolans take any particular interest in, and Jen’s going to be able to work with a very large degree of autonomy, including working a lot from home. A high-intensity Gawker Media gig with zero job security this is not; instead, Jen will overnight become the highest-paid blogger on any media company’s payroll, anywhere in the world.
As for Jake, he’s surely at or near the very top of his NYU Stern business-school class right now when it comes to financial success — and he’s done it on his own terms, building a spectacular archive of photographs in his plentiful spare time, never once dealing with a boss. The idea that he would have been better off trying his luck at Goldman Sachs or becoming a fancy Moveable Type consultant is laughable. (Jake would last about 10 minutes at Goldman, as he’ll be the first to tell you.)
Jake and Jen worked hard building something they were rightly both very proud of. They never sold any equity to anybody, and they ended up selling their company at a time of their choosing: I don’t think it’s a coincidence that both have recently become parents for the first time. They both have long careers ahead of them at Rainbow if that’s what they want, or can leave after three years with a world of opportunities and bulging pockets. So when Nick tells his readers to “hold off on the envy”, he’s living on a completely different planet. Jen and Jake have achieved something great here: they’ve built a real blog business with seven-figure revenues from scratch, they’ve got rich doing so, and they did it their way, on their own terms, all before either of them turned 35. Many congratulations to them both.
*Update: And that’s pre-tax. As right points out in the comments, Denton’s math is post-tax. I don’t think anybody on the editorial side at Gothamist comes close to making $150k after tax — and even making that much money as a fancy Moveable Type consultant is not going to be easy. Believe it or not, there are even junior analysts at Goldman Sachs who don’t make $150k after tax.