The future of Politico is in question after the bombshell news that five of its top figures are leaving — including co-founder and CEO Jim VandeHei and top political columnist Mike Allen.
The question burning across media insiders’ email and Twitter today: Why? And what next?
The company, which revolutionized news coverage in Washington with its fast, obsessive coverage of backroom dealings and D.C. personalities, had been expanding at a steady pace under VandeHei’s leadership. But it also suffered from editorial staff exits in the brutally competitive news market. And it is growing far more slowly than competitors The Washington Post and The Hill in the past year.
It may soon get another rival: VandeHei plans to launch a new venture.
The Washington Post — where VandeHei worked before Politico — has had explosive traffic growth in the past year, growing 95 percent in page views year-over-year as of October. The Hill has grown even faster, with 175 percent traffic growth year over year in December, according to ComScore.
How the loss of Mike Allen will resonate is unclear. His “Playbook” memo is a daily must-read throughout Washington D.C. It is also a cash cow for Politico, generating about $250,000 per month for the company, according to a rival executive familiar with the site’s advertising.
The word going around media circles is that publisher Robert Allbritton clashed with VandeHei over strategy, leading VandeHei to exit, and his top deputies to follow him.
At an all-staff meeting on Friday morning, publisher Allbritton and editor in chief John Harris tried to calm the waters.
“We’re taking a step sideways – and then we’re leaping forward,” Allbritton told his staff, according to former Politico writer Dylan Byers’ account of the meeting. “I want to push the accelerator in investing in the place further and faster than we’d anticipated.”
Whether that acceleration was the source of a clash between VandeHei — who was promoted to president and CEO in 2013 — or to something else is the subject of intense speculation.
Byers — who left to join CNN last September — cited several insiders as saying the site suffered from “a crisis of vision and a leadership void.”
A top Politico insider denied this to TheWrap, but said that once VandeHei decided to leave to start his own company, his top deputies decided to follow. Those leaving include chief operating officer Kim Kingsley, chief revenue officer Roy Schwartz and executive vice president Danielle Jones.
Most of the employees will stick around through the election but Kingsley will leave the company early this summer and Jones plans to leave before then.
The head of the D.C. newsroom, Susan Glasser, also announced she’d be leaving her position, but that was a personal decision related to her husband taking a job as the New York Times’ bureau chief in Jerusalem. Glasser will transition to an innovation position.
At the staff meeting, Allbritton acknowledged it would be tough to replace Allen, but said his role will be filled with more than one reporter.
“The only way to replace a one-man army is with an army, so that’s what we’re going to do,” Allbritton said, according to Byers.
Meanwhile, Harris reportedly told the staff that Politico “lost control of our own narrative” when the news broke last night.
In a memo last year, Politico mentioned ambitions of a “journalistic presence in every capital of every state and country of consequence by 2020,” according to the Washington Post.
Traffic at Politico is growing, but not as fast as its competitors’ traffic despite it being a presidential election year. Politico had six of its Top 10 most-visited months in the history of the company in 2015. Both uniques and page views grew by 15 percent compared to 2014. But 2014 didn’t offer a presidential campaign featuring Donald Trump.
Politico has insisted its business model isn’t built upon chasing scale, but rather on seizing, holding and systematically growing a targeted audience of influencers. But with monthly uniques often surpassing 12 million readers, scale shouldn’t be an issue.
The subscription business, Politico Pro, may have hit a ceiling. And the company has staggering overhead for a mainly online news operation. Allbritton noted in his memo Thursday that the site has 500 employees.
“They did a good job with Pro, but there’s only so many profitable buckets you can sell,” said a top executive at a rival news site. “They ran out of great areas, meanwhile others are taking market share in advertising and size. “
Politico may also soon face a stiff competitor with an inside knowledge of the site’s operations: VanderHei’s still-undefined new venture. Confirming his departure in a memo, VandeHei said: “I caught the entrepreneurial bug a decade ago when we started this place and can’t seem to shake it. I plan to start a new venture when I depart.”