[burkaman]

> Between the lines: The Atlantic's new majority ownership stake from Emerson Collective, the impact investment vehicle owned by Laurene Powell Jobs, has allowed the company to accelerate its growth in recent years, including a major staff increase and expansion that began in 2018.

"Emerson Collective is a social change organization that uses a broad range of tools including philanthropy, impact investing, and policy solutions to create the greatest good for the greatest number of people. Established and led by Laurene Powell Jobs, Emerson Collective is working to renew some of society’s most calcified systems, creating new possibilities for individuals, families, and communities."

- https://www.emersoncollective.com/about-us/

Laurene Powell Jobs has ~$22 billion. She could pay the salaries of these 68 employees for the next 10 years if she felt like it without noticing a change in her bank account.

Obviously she is not obligated to do anything, but if employees of my "social change organization" that were hired under my watch, with my encouragement, were impacted by a possibly temporary economic downturn in the middle of a global pandemic and I could help them without sacrificing anything, I hope I would.

[ABeeSea]

She does not have $22B in cash. You pay employees in cash. Impact investing is just as brutal as any other investment fund. Dollars can be deployed more impactfully elsewhere. The goal is investments that create long term structural change and subsidizing employees of a declining business doesn’t move them towards that goal.

[mikeyouse]

The point is the business wasn't declining until she changed the mission.. In addition to her Apple wealth, she owns roughly 100 million shares of Disney. 68 staff cuts at $150k/year all-in cost mean she'll save roughly $10M/year.

So she could sell 0.08% of her shares in Disney at today's price and these people would be employed for another year to work on the mission that she / the collective chose.

[donohoe]

"The point is the business wasn't declining until she changed the mission"

WTF? No. Are you just making this up?

She, via Emerson Collective, has invested heavily and they would be in greater trouble were it not for her.

(I used to work for Quartz which was started by The Atlantic so my comments are based on actually having been there and know how these operations work)

[burkaman]

They were profitable for 8 years before she bought them.

https://www.axios.com/the-atlantic-to-expand-adds-100-people...

[chipotle_coyote]

That doesn't mean they stopped being profitable after she bought them, or that she "changed the mission," as a previous poster put it. Just like many other businesses, an infusion of cash allowed them to expand.

It's easy to criticize them for that now, but there's a real sense in which that critique amounts to, "Instead of expanding, they should have used that infusion of capital to restructure their finances in a way that let them survive a dramatic collapse in revenue that happened virtually all at once."

[sanderjd]

I don't know how you could read this thread and get to what you wrote for your alternative "instead of expanding". The alternative proposed by the thread starter is something like: "having invested in expansion, she should continue supporting the employees that were hired during that expansion". And that expansion is the change in the mission that the thread starter is referring to.

[burkaman]

I am not criticizing them for expanding. I am criticizing Jobs for using her power to hire more people, but not using her power to temporarily maintain their jobs in a uniquely dangerous situation.

[wonnage]

expand? you mean like wework? or any of the other softbank unicorns?

[danvayn]

They did spin up staff numbers and who knows how much was spent on business facets like advertising. I'd atleast agree that it might not have been the best investment decision given the large amount of "competitors" in Atlantic's space

[donohoe]

Yes, the added staff and that lead to the pay-wall they have which was helpful and a long-overdue idea.

[donohoe]

Yes, and print ad revenue continues to march towards the cliff, and then Covid 19 killed companies digital ad budgets and that cratered.

These are all circumstances affecting nearly every media company right now.

[burkaman]

I understand, and most media companies are going to be forced to lay off people when they simply don't have enough money to pay them anymore. I don't blame them if there's nothing they can do. This is a relatively unique circumstance where the owner could easily keep paying them if she wanted to, but has chosen not to. Ad revenue and live events are not gone for good, just for a little while.

[burkaman]

I know she doesn't literally have $22 billion in a bank account, but she could obviously scrounge up enough cash to pay these people if she wanted to.

The Atlantic is not a "declining business". It was profitable for a long time before she bought it, it expanded because she wanted it to, and the decline in revenue is likely temporary. They aren't losing subscribers and they aren't in danger of failing anytime soon.

If she invested in The Atlantic to create long term change, and its subscriber base and reach is growing (which it is), then she shouldn't care about a short term decline in ad revenue. Dollars can certainly be deployed more profitably elsewhere, but you're not gonna accomplish any social change if you base your investments on quarterly profits.

[ABeeSea]

> it expanded because she wanted it to

And now it’s shrinking because she wanted it to.

[burkaman]

I think we're on the same page. She has an immense amount of power which she is wielding in a legal and fairly conventional manner, but one that I consider ethically wrong.

[phlakaton]

Ethically wrong?

Are you saying she is ethically obliged to employ as many people as her bank account makes possible, for as long as her bank account makes that possible?

Or that, having committed to a certain number of employees, she is ethically obliged to maintain that number indefinitely?

You seem to be making a large assumption with the latter: that the dip in revenue is a blip. However 1) general trends in the industry have been pointing down for years, 2) we don't know if business will bounce back to the same level, let alone when. Making an ethical judgment about someone else's business from the outside is fraught enough, but with this level of uncertainty, why would you even go there?

[burkaman]

I think the dip might be a blip because they were profitable for 8 years before she bought them a couple years ago, and they were continuing to do great until the pandemic.

It's a difficult question because I don't think she should be able to have this much power in the first place, so it's hard to say what the most ethical way to wield that power is. I don't think she is obligated to employ as many people as possible for as long as possible.

My basic point is that the magazine is still reaching more people than ever before, it's still achieving its journalistic purpose, so why not use a tiny portion of your immense power to keep these people around for a year or so and see if economic conditions improve. If there's a fundamental shift in the business and, for example, it seems like live events are never really going to happen again, then it's time to let those people go.

[pochamago]

I don't think I understand. Would it have been more ethical in your system if she hadn't hired them in the first place?

[burkaman]

It depends what she did instead. If she just left her money in the bank, no, that's worse. But it would have been more ethical to spend her money in a way that wasn't exclusively dedicated to making more money. Maybe start a collectively owned media organization where power isn't concentrated in one person. Or donate to an existing nonprofit media organization, where revenue is more closely correlated to social impact than the economic health of third party advertisers.

Basically just stop trying to make more money. You don't need any more. Do something to make the world better.

[uoaei]

People who have control over $22 billion have the ability to get a large sum of physical cash very quickly.

The problem is who gets to choose what is "more impactful". Maybe some of those staff were getting ready to shatter the world with an insane revelation that instigates "long-term structural change" and makes life better for everyone. Then Jobs would have invested her money improperly. But because she gets to almost unilaterally decide what happens under her purview, those former employees never get a chance.

[ciarannolan]

>She does not have $22B in cash.

The idea that someone worth $22B can't snap their fingers and have a few million dollars cash available is ridiculous. Do you think there are no buyers for Apple or Disney stock?

[SheinhardtWigCo]

One plausible explanation is that management wants these employees out, so they're taking advantage of a once-in-a-decade opportunity to trim headcount without PR consequences.

[codebolt]

Which is of course extremely cynical, as this is a very bad time to be tossed out into the job market.

[donohoe]

Thats not plausible at all.

This lockdown has devastated media advertising across the board. Events require in-person experiences which are just not possible in the near-term.

[TechBro8615]

Why does an “impact investor” own a newspaper anyway? Does this affect story selection and editorial behavior?

What “impact” could one expect to have by investing in a media organization, other than pushing an agenda?

[nojito]

Keeping the press alive is a worthwhile endeavor.

I'd rather the world not turn into Youtube News coming out of some basement with no staff that actually goes out and investigates. Instead he is able to carve a bubble to share what he/she thinks as news.

[mc32]

Of course. It’s the same reason “think tanks” are established.

You could always argue it’s good to get people to think and bring workable ideas to life... but of course the employees at these think tanks know who pays their salaries and what the expectations are.

[untog]

Do you think that an informed population is a net positive or a net negative? I personally think the former, and I had a pool of spare cash lying around I might try to put money towards that effort.

[fullshark]

Only if they are informed about the topics I think are important primarily, with a focus on the facts that sway them to the positions I support. Otherwise they might support a government backing policies I disagree with.

[testbot123]

Same reason I donate to NPR: to support quality journalism.

[ForHackernews]

Of No Party or Clique

[spikels]

Do you really want to get your information from a source where hiring decisions depend on a single person with huge interests and biases? I don’t.

[burkaman]

No, not really. I would prefer a society where it's not possible for one person to accumulate this much power over other people.

[RickJWagner]

Several established, profitable businesses have been repurposed for social change.

ESPN, The Atlantic, etc.

As a conservative, I find it a little unfair. The institutions typically have built up a legacy of middle-of-the-road communications, then they are repurposed with a decidedly leftward tilt.

Still, The Atlantic provides enjoyable to read articles, even if I don't agree with everything they say. I'm not happy that they undergo this loss.

[rayiner]

The “billions of dollars” these people have can’t be used, at scale, to pay the salaries of workers during the economic shutdown. Almost all of that wealth is paper money—the promise to receive a share of future profits from operating companies. If the economy is shut down and those companies aren’t making profits, that equity isn’t worth anything.