The private equity firm does not plan to shutter any of their newly acquired websites and has an eye toward expansion, says a source familiar
Great Hill Partners, which announced plans to acquire Gizmodo Media Group and The Onion from Univision on Monday, will honor all pre-existing union agreements, a person familiar with the matter told TheWrap.
In addition, the insider said it was “too early to say” whether any layoffs were planned for the newly created G/O Media but that “no sites will be shut down” after completion of the sale.
The Boston-based private equity firm Grant Hill Partners is “going to be honoring the union agreement both in New York with former GMG staff and with the Onion in Chicago,” the individual said.
Gizmodo Media’s employees signed an expansive multi-year union agreement with Univision just last month that included “3% guaranteed (pay) increases in each year of the contract,” and “increased severance for layoffs with a guaranteed minimum of 11 weeks with no trigger threshold,” according to a release by the Writers Guild of America East.
The agreement also critically included a “successorship agreement” that would “protect the contract in the event of a sale” — though it’s unclear what legal obligation Great Hill has to honor the agreement. A rep for guild said the company had no choice.
“Great Hill Partners did have a legal obligation to accept the union contract because the deal was structured as an equity sale. GMG had agreed that a buyer had to assume the CBA either way (that is, equity sale or asset sale),” a rep told TheWrap via email.
The news puts to bed — at least in the short term — worries that Great Hill planned a draconian slash-and-burn approach to its acquisition of the long-troubled websites, which Univision had acquired three years ago for $135 million. While neither Great Hill and Univision disclosed the sale price on Monday, an insider told the Wall Street Journal that it was considerably less than that.
Great Hill said it would fold the new Gizmodo websites into the newly created G/O Media that would be led by longtime digital veteran James Spanfeller.
“This opportunity comes at a time when the entire digital media category is beginning to be recognized again for its unique ability to meet the diverse content and delivery needs of consumers and advertisers,” Spanfeller said in Great Hill’s press release. “As the largest player in our space, G/O Media is in an ideal position to capitalize on this dynamic, and I am excited to collaborate with a great team that boasts an incredible track record to further expand our reach, add value to our advertisers and enrich our visitors’ lives.”
The sale is a major defeat for Bustle Digital Group chief Bryan Goldberg, who purchased Gawker.com last July for $1.35 million and was known to be keenly pursuing the rest of the former Gawker Media possessions.
Goldberg has become known as a buyer of last resort for troubled sites, which lately have included Mic.com and The Outline. The sale of Gizmodo Media to Great Hill ensures that the original titles of the Gawker Media will continue to remain divided from their flagship website for the foreseeable future.