Village Voice Media, owner of the Voice and a dozen other alt-weeklies across the country, has decided to try a nifty trick: it's cleaving itself in two. Executives from the company are "buying out" all of the papers, putting them into what is technically a new, standalone company. And VVM's main profit center, hooker ad site Backpage.com, is going to be left in its own separate company, controlled by VVM bosses Jim Larkin and Michael Lacey. This is a weird gambit.
The only rational reason to do this is to try to end the ongoing (and successful) PR campaign that's been waged against the company over its ownership of Backpage, which has a pesky tendency of hosting ads for child prostitutes or sex trafficked girls once in a while. Advertisers have fled the company's alt-weeklies as a result of the bad publicity over the past year or more. But more advertisers have fled the company's alt-weeklies due to facts that A) Craigslist took all the classified advertising away from alt-weeklies, and B) print newspaper advertising in general has been dying for a decade. In short, alt-weeklies are a dying business model. So what's the plan here?
I mean, sure, fine, you spin off Backpage (which had revenue close to $30 million last year, and which is a very successful business, due to the fact that it's occupying a niche that Craigslist decided to get out of), and maybe, maybe you quiet down all the boycotts of the newspapers, which are now in a separate company. But, so what? You now have a company consisting solely of alt-weeklies, which are a dying business model, and without the hooker ad revenue that was keeping the whole thing afloat. Where is the logic? There's a bit of obscurity in the deal—it could be that Backpage's owners will simply turn around and funnel that money back into the papers as investors. Or, maybe it's true what Scott Tobias, the new CEO of the group of newspapers, says to Keith Kelly:
He insisted the new company is "absolutely" profitable without the lucrative Backpage and that he has no connection to or investment in the site.
That would absolutely blow my mind if true, but... who are we to say? I mean, logically, it seems more likely that these alt-weeklies will just continue their downward spiral faster without all that hooker ad money, unless there is some financial trickery here that we're missing. But hey, we're pulling for them. Good luck to all alt-weekly employees, for as long as it lasts.