RevealA week ago, reporters and editors in the combined newsroom of DNAinfo and Gothamist, two of New York City’s leading digital purveyors of local news, celebrated victory in their vote to join a union.
On Thursday, they lost their jobs, as Joe Ricketts, the billionaire founder of TD Ameritrade who owned the sites, shut them down.
At 5 p.m., a post by Mr. Ricketts went up on the sites announcing the decision. He praised them for reporting “tens of thousands of stories that have informed, impacted and inspired millions of people.” But he added, “DNAinfo is, at the end of the day, a business, and businesses need to be economically successful if they are to endure.”
All other articles promptly vanished from the sites; an official at DNAinfo said they would be archived online.
Mr. Ricketts wrote that he founded DNAinfo in 2009 “because I believe people care deeply about the things that happen where they live and work,” and he thought he could build “a large and loyal audience that advertisers would want to reach.” DNAinfo and Gothamist, which Mr. Ricketts bought in the spring, attracted more than 9 million readers a month, in New York and other cities where they operate satellite sites, DNAinfo said.
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But in the financially daunting era of digital journalism, there has been no tougher nut to crack than making local news profitable, a lesson Mr. Ricketts, who lost money every month of DNAinfo’s existence, is just the latest to learn. In New York City, the nation’s biggest media market, established organizations such as The Village Voice, The Wall Street Journal and The Daily News have slashed staff or withdrawn from street-level reporting. The Voice stopped publishing its print edition in September.
For DNAinfo and Gothamist, the staff’s vote to join the Writers Guild of America East was just part of the decision to close the company. A spokewsoman for DNAinfo said in a statement, “The decision by the editorial team to unionize is simply another competitive obstacle making it harder for the business to be financially successful.”
The decision puts 115 journalists out of work, both at the New York operations that unionized and at those in Chicago, Los Angeles, San Francisco and Washington that did not. They are getting three months of paid “administrative leave” at full salary, plus four weeks of severance, DNAinfo said.
The news took the newsroom by surprise. David Colon, a reporter for Gothamist, said that a lawyer for DNAinfo was present when the staff was told, but that he “didn’t really” take questions.
“Very classy,” Mr. Colon said. “I yelled a lot and somebody told me to stop. Now we’re all trying to figure out what to do.”
Merging DNAinfo and Gothamist was intended to ease some of the financial strain. But the two sites were an odd mix. DNAinfo specialized in street-level reporting on neighborhood issues not covered in other media, including real estate developments and crime. Last year, the staff’s coverage of an East Village explosion was a finalist for a prestigious Deadline Club award. Gothamist brought a puckish attitude to articles that were sometimes original, sometimes based on news published elsewhere.
Ben Fractenberg, who joined DNAinfo in 2010, said that the hope was that as local newspapers around the country foundered, DNAinfo would create “a new business model” for local news. “We were all united on that,” Mr. Fractenberg said. “And that never wavered.”
But the profits never materialized.
Journalism in general has become less profitable as print advertising, which commanded high prices, has crashed, and revenues from digital advertising have not replaced it. Local newspapers and sites, which deliver smaller audiences for advertisers, have been particularly pressed. The New York Times has also cut back on its local coverage of New York City, closing regional bureaus, for example.
Patch, a network of hyperlocal news sites that started two years before DNAinfo in 2007, is one relatively bright spot on the local-news landscape. It says it is now profitable, after cutting more than three-quarters of its staff in 2014 and deciding to duplicate much of its content across more than 1,000 local sites. Patch also changed its advertising policies to sell space more efficiently.
The city also has its share of locally owned neighborhood sites, including West Side Rag and Tribeca Citizen in Manhattan, Bklyner in Brooklyn and Sunnyside Post in Queens. West Side Rag’s founder said the site is profitable.
When the DNAinfo and Gothamist New York newsrooms first moved to join the union in April, management warned that there might be dire consequences.
DNAinfo’s chief operating officer sent the staff an email wondering if a union might be “the final straw that caused the business to close.” Around the same time, Mr. Ricketts, whose family owns the Chicago Cubs, wrote, “As long as it’s my money that’s paying for everything, I intend to be the one making the decisions about the direction of the business.”
In September, Mr. Ricketts, a conservative who supported President Trump in last year’s election, raised the ante with a post on his blog titled “Why I’m Against Unions At Businesses I Create,” in which he argued that “unions promote a corrosive us-against-them dynamic that destroys the esprit de corps businesses need to succeed.”
But reporters at many digital news sites make only a fraction of what staffers made in the heyday of print newspapers. And in joining the Writers Guild of America East, which has organized staffs at some larger digital organizations, including Vice and HuffPost, the DNAinfo and Gothamist staffers hoped for stability and recognition.
Emma Whitford, a Gothamist reporter, said that organizers from the union assured the workers that threats to shut the sites down were just “textbook union-busting tactics.”
The union said in a statement: ”It is no secret that threats were made to these workers during the organizing drive. The Guild will be looking at all of our potential areas of recourse and we will aggressively pursue our new members’ rights.”
After last week’s vote, one DNAinfo reporter, Katie Honan, said, “If this is the future of journalism, it should be a career for people, not a postcollege hobby.”
When the email from Mr. Ricketts landed, “it hit the newsroom like a thunderclap,” said Scott Heins, a Gothamist reporter. “At Gothamist we feel as if the choices made to merge are what set us on this path. I’m very adamant that the union didn’t kill DNAinfo and Gothamist, Joe Ricketts made the decision to kill Gothamist and DNAinfo.”
