Deep Cuts Brought Daily Voice Back From the Brink | Street Fight

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Deep Cuts Brought Daily Voice Back From the Brink

26 Comments 07 March 2013 by

daily_voiceIt was a dark 48 hours for Daily Voice. Unable to convince investors to wait on profitability at the rapidly growing regional network of 52 news sites, CEO Zohar Yardeni resigned last Friday, along with his COO and marketing director. Faced with uneasy investors and a cash burn of $500,000 a month, the company’s founder Carll Tucker wondered: “Is this it?”

Tucker’s self-questioning came amid ominous drumbeats that were reverberating through a hyperlocal publishing industry fixated on sustainability. In the early weeks of the 2013, NBCU shuttered the 19-city EveryBlock network of neighborhood data points; Chicago hyperlocal pioneer Mike Fourcher announced he was looking for somebody to take over his two highly-regarded-but-financially-struggling sites; and AOL’s Patch dug in for another round of cost-cutting and repositioning.

But for Daily Voice, the dark weekend suddenly began brightening early Sunday afternoon. After 48 hours of number crunching, Tucker had produced a one-page document that he was convinced would be the company’s passport to a secure future. At 12:26 p.m., a now-confident Tucker went into a phone conference meeting with investors and showed them how, through substantial cost-cutting that brought the cash burn down to $150,000 monthly, Daily Voice would achieve profitability in six months to a year.

Based on what Tucker showed them, the company’s investors are now “absolutely” committed to taking Daily Voice to the point where it could attract “a major strategic partner” who would have the wherewithal to expand the network nationwide, he told me. “They saw a model that would work,” he added. “All the business indicators are now moving in the right direction.”

During the Sunday conference call, Tucker re-assumed the titles of CEO and president that he gave up in the fall of 2011 when Yardeni came on board from a top job at Thomson Reuters rebuilding the financial service giant’s Web platforms. This time, Tucker will take those jobs without any pay. (He received “modest” compensation the first time around.)

To cut costs immediately, Tucker closed Daily Voice’s 11 community  sites in Central Massachusetts, reducing the size of the network to 41 sites — concentrating all of them in the affluent suburban counties of Westchester in New York and Fairfield in Connecticut. He also eliminated almost all the corporate staff and closed the high-rent New York City office in TriBeCa. [As noted on Gawker yesterday, these layoffs were not executed with much tact.]

Other cost savings will come from additional streamlining of news operation — what Tucker calls “Web 2.0.” Press releases and other such content that doesn’t require major reporting will be produced “more economically” by a “redeployed” editorial staff. Good stories in competing publications will be aggregated with full credit. “I’m perfectly willing to curate a story from the Stamford Advocate [a competing publication owned by Gannett],” Tucker said.

Daily Voice already outsources the preparation of obituaries – a top reader feature – to India. Weather stories are being provided by a syndicated service that doesn’t have to be paid overtime during snow storms or hurricanes. Earlier cost-cutting included reducing the top editorial management for the New York and Connecticut operations from 10 people to six and consolidating the two counties’ four newsrooms into two.

Tucker said the editorial model he created in 2009 was based on print newspapers: “It was too expensive, and it didn’t work for the Internet,” he said. “I want to build something that provides quality news to the community, but the only way you can do it is with a sustainable business model. There is no freedom of the press unless it’s profitable.”

Despite the ongoing cash burn, Tucker said Daily Voice was performing well in all user metrics.

“There has been an astonishing growth in traffic,” he said. “We serve a population of 1.5 million men, women and children, and, with our 432,000 unique visitors in New York and Connecticut per month, we serve one out of three of that population. We have just a hair under 2 million page views per month.”

“The difference between Daily Voice and many other noble experiments in local online news is that we’re actually on target without having to cut back what we’re doing for the community, or change our mission” he said.

Tucker and his wife, personal finance journalist Jane Bryant Quinn – a close adviser – praised remaining Daily Voice staff for how they reacted to the weekend corporate crisis. “Everybody is very up,” Quinn said. “The team is in,” Tucker said. All 40 Daily Voice staff members are part of a company profit-participation plan that will be strengthened to offset dilution from the “financial reset,” Tucker said.

Tucker, a longtime community journalist who sold his Trader Publications to Gannett in 1999, founded the network under the name Main Street Connect in December 2009. The first site was in Norwalk, Conn. It quickly grew to 10 sites, and then, in early 2011, with more financing from investors, grew by another 32 sites that spread the network to neighboring Westchester. The 11 now-closed Central Massachusetts sites that were added at the same time grew the chain to 52 communities. When Daily Voice was on its expansion tear in early 2011, Tucker talked about building out a national network of 4,000 sites by the end of 2014.

For earlier Street Fight coverage of how Tucker shaped Daily Voice and built it into a regional network, see Q & A and article by Tucker responding to critics. There is also this interview with then-CEO Zohar Yardeni forecasting that Daily Voice would be profitable before its competition.

Tom Grubisich authors The New News column for Street Fight. He is editorial director of LocalAmerica, which is partnering with InstantAtlas to develop sites that will present how communities rate in livability. Local America is featured on the Reynolds Journalism Institute’s Pivot Point site.

  • TruthTeller

    This is the biggest load of crap-spin ever written. “Everybody is very up,” Quinn said. “The team is in,” Tucker said. All 40 Daily Voice staff members are part of a company profit-participation plan that will be strengthened to offset dilution from the “financial reset,” Tucker said.

    This writer should interview someone other than the man who steered this ship into the rocks in the first place.

    The place is in ruins, and Carll Tucker is an egomaniacal, fat-cat bastard who cares only for his own deluded dreams, and not for the people who have fallen while he fails to execute it.

  • U.R. Truthiness

    Some head scratchers: Where were these high-powered board members over the long period of time the company was tanking? Why was a young know-nothing appointed to various top management jobs? And where was the logic in choosing a web platform rebuilder to run a news company?

  • mediamate

    the biggest difference between MSC and Patch is we’re profitable.. — Carll Tucker, CEO MSC

  • Street Death

    What fool would want to come on board to a money-losing operation and expand it nationally? The concept of, “Look I failed to turn a profit here, let’s expand so we can take this model across the USA” is bizarre. The big hyperlocal news organizations slash away at what they’re selling, local news, and then put out a press release how things are better than ever and they’ll be turning a profit soon. If McDonald’s saved money by eliminating meat from their burgers, how long would they survive? Where’s the beef?!?

  • HudsonValleyNewsie

    As someone on the inside this is absolute spin. Here’s why: All the reporters left are young kids, and almost none of them are from this area. Most are from out of state. There is literally nothing keeping them tied to this area. They don’t have children or spouses, they don’t own homes, and many of them are trust funders. Many are already looking for new jobs elsewhere and will resign in a heartbeat as soon as they can.

    • Slam

      theyre not all young kids. there are established people, no, pprofessionals who have families here. and yes, some of them are kids, who grew up here and now want to work here. it is a spin, but the idea that the remaining reporters are kids with no ties is as silly as this mess of an article that lies above this.

      • HudsonValleyNewsie

        There isn’t a single reporter left with over five years experience. Most have much less. That isn’t an insult. It’s a fact. And every one of them is already looking for work elsewhere.

        • SadlyInTheKnow

          That might be true in New York but it’s not true in Connecticut. Most are 20-something but one is at least 40, and two are in their 30s. Only one is from the community he is covering and none have families. They all want out ASAP.

  • SadlyInTheKnow

    Does Carll Tucker own part of StreetFight? This article is PR baloney.

    The most laughable line is”Weather stories are being provided by a syndicated service that doesn’t have to be paid overtime during snow storms or hurricanes.”

    No one on The Daily Voice’s editorial staff has ever gotten overtime. (I don’t know about other departments.) It doesn’t matter if you routinely work 60-70 hours a week, you get paid your salary, that’s it.
    Conditions improved dramatically when Zohar came in. At least employees were offered a comp day for rushing out in the middle of the night to get breaking news or covering weather on the weekend.
    Carll Tucker let go people who had been with him since he founded the company, people who had worked very, very hard to see it become successful. He let go people who have developed health problems while slaving for him. There are no severance packages. Don’t let the door hit you on the rump.
    Expect lawsuits.

  • Eddie Tor

    Rah, Rah, TDV! Street Fight drinks the Kool-Aid! Carll Tucker gutted TDV and ruined a lot of lives to save his ego trip. Working for no pay? Awww. And after just getting back from a vacation to Cambodia and Vietnam, too. He talked of reinventing journalism, bringing back the heyday of community journalism online. He also talked about it making him sick to think of a reporter taking off two days in a row. He and his hand-picked, unqualified, morale-killing content manager pushed people to work themselves into a state of exhaustion and then discarded them. The lies and the insensitivity of the layoffs were epic. And it continues. The staff is all in? The all-in staffers I have talked to are looking to bail all-out ASAP, and they say the sentiment is nearly universal. TDV sites, like this article, are a bad joke.

  • Former Reporter

    What a joke of an article. Could you be kissing up to TDV even more? You make it seem like nothing is wrong with the company lol.

    I know many of the reporters in the WC branch and trust me, they are all looking for work elsewhere. No chance of a raise ($24,000) and having to write 4 articles/day and 20/week isn’t great.

    They are all great reporters, so I’m sure they’ll catch on somewhere else. Can’t wait to see TDV go down the drain haha

  • Former Reporter

    You really should be ashamed of yourself for an article like this, Tom. You don’t even mention the email Carll sent out Friday stating that there’d be good news on Monday only to lay off at least 25 people. This article was as pathetic as The Daily Voice.

  • http://twitter.com/westseattleblog West Seattle Blog

    2 million pageviews/month for the remaining 41 sites? If true, that’s astonishing all right … astonishingly low. We average a million/month for our one, lone, non-jumping (a single pageview to the home page will allow you to read almost every current story) site. And our costs/expenses are lower without outsourcing to anyplace beyond the freelance photojournalists and reporters who live within a few miles radius. Hope everybody who’s out of this will do the right thing – found their own, one-off, independent, non-chain, community-serving site, the ONLY way the neighborhood-news business scales.

    • http://www.facebook.com/nancy.g.chapman.5 Nancy Guenther Chapman

      I did that. (Course, I got out four months ago …)

      http://www.nancyonnorwalk.com/

    • Eddie Tor

      Well said. And so true.

  • Ms.Marple

    A trip down memory lane:

    “You really have to be serious about being a great community news site. You
    can’t just pop somebody into a place and say “go report the news.” You have to
    figure out what news readers want, and how to get it to them. And you have to
    have an organic connection to your community. You have to live there, or
    somebody has to live there, so you are in touch with the community.” – Carll
    Tucker, May, 2011

    http://streetfightmag.com/2011/05/17/main-street-connects-tucker-hyperlocal-needs-scale/

    • Soul Survivor

      Here’s a quote you haven’t seen: “You’re all basically volunteers.”
      That’s Carll at a meeting, talking to his underpaid reporters.

      • OhBoy

        Was that the same meeting when the company was told MSC would be the next Facebook or Google?

        • Soul Survivor

          Maybe. We heard that more than once, especially the Facebook thing. Good times!

  • Ms.Marple
  • DiverDan

    “We are not yet profitable, but believe we are far closer than any other large digital competitors.” – ” I believe “boots on the ground” are required in order to produce engaging community news.” – Zohar Yardeni, Aug. 2012. OOOPS!

    • EnlightenedUp

      I was wondering why I had never heard of StreetFightMag. Then I read this article. Now I get it.

  • Blogbiz

    “They bought us a year and a half ago and made a lot of stupid
    decisions,” she says, referring to the purchase of an office in Lower
    Manhattan’s Tribeca neighborhood and lavish holiday parties to which all
    staff members were invited. “They would offer to put us up in hotels.
    All this stuff that had nothing to do with community news.” – http://www.worcestermag.com/blogs/dailyworcesteria/Daily–Voice-shutting-down-Mass-sites-195096561.html?blog=y

  • http://www.facebook.com/victoria.roach.58 Victoria Roach

    This is called save your ass! After his bad press in the Gawker, he had to come up with something! I have no respect for him or his online paper!

    • HudsonValleyNewsie

      That Gawker article is priceless. Anybody who wants to know what kind of heartless bastard Tucker is needs to read that ASAP!

  • Eddie Tor

    A favorite passage from Street Fight in May 2001:

    “In Fairfield County, 420,000 population, that’s 24 full time employees.
    In Westchester, where we expand on June 1st (opening 31 sites on that
    one day), that’s 750,000 population and that means about 30-some
    full-time editorial employees. So between the two of them we’ll have
    about 60 full-time editorial employees, and it breaks even in 12 months
    and it repays its

    investment in 24 months.”

    Today: Fairfield has 8 editorial employees, Westchester 13. Total 21. Profitable? No. And a quick site survey shows that very few reporters need to put on shoes to do their jobs. Press releases, reporting off other websites and aggregating rules the day. Fairfield and Westchester are too smart to buy into this.


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