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The conservative investment group offering $30 million to take control of The Messenger news site will not be looking to create a right-wing media vehicle, according to an individual close to discussions to buy the financially strapped news site owned by Jimmy Finkelstein, who told TheWrap: “Creating Breitbart 2.1 is not the move.”
“Anyone who puts up tens of millions of dollars for a company is going to want some control,” the person said. “There is genuine interest on both sides in acquiring The Messenger, as investors we believe it is a good product and they have some excellent reporters and a lot of tentacles in a lot of places,” the individual said, adding,”They are getting a lot of clicks but bleeding cash and not generating enough revenue.”
Founder Finkelstein has been reassuring panicked staff after announcing 20 layoffs this week — and as he considers selling a majority stake in the business to a group of conservative investors. They include Omeed Malik, a financier who backed Tucker Carlson’s new media venture; Garrett Ventry, a Republican political operative; Ryan Coyne, the CEO of digital media company Starboard; and George Farmer, who sits on the board of Britain’s conservative news network, GB News, The Wrap previously reported.
They have offered $30 million for a 51% stake in The Messenger, based on a $60 million valuation, which means Finklestein would have to relinquish control, the individual close to the discussions said.
The New York Times reported Thursday that the site burned through $38 million in costs during eight months of operation in 2023, and generated only $3 million in revenue. Those close to the platform’s investors confirmed the figures to The Wrap
The Messenger is meant to be a centrist platform for news, but like Finkelstein’s previous media property, The Hill, is perceived as right of center partly due to a “soft” launch interview with former president Donald Trump which didn’t challenge him on anything material.
Staff at the news start-up were stunned this week by a Semafor report that The Messenger board considered shutting down the site because the company would run out of cash at the end of January, which it has denied.
Meanwhile, as Finklestein is seeking to raise $20 million in funding — and sources said he has already secured a portion of that sum — he met with the new investor group on Wednesday to discuss them acquiring a majority stake in his digital news outlet.
The individual familiar with the discussions between Malik’s group and Finkelstein told The Wrap that the investor group has “zero desire” to move The Messenger from its centrist position to reporting to the right. “We won’t be touching the news division,” the source told The Wrap, “Creating Breitbart 2.1 is not the move.
“There is zero desire to interfere in the reporting from the group. The Messenger has done a good job remaining right down the middle and that’s why it is an attractive investment.”
While a $30 million offer has been made and there is genuine interest from both sides, “the devil is in the details,” the individual said. “The investment group has to see everything on the hood before the deal goes ahead.”
A second individual told The Wrap that Finkelstein is equally motivated to sell. “Jimmy is genuinely interested in selling, but all these negative headlines are not helping,” said this person. “There are some concerns among the staff about the motivation of a conservative group buying a money-losing platform in a tight election year.”
The Messenger launched in May 2023 with 300 journalists following a $50 million investment from Stagwell Group, led by Mark Penn and former Hearst CEO Victor Ganzi. Other investors include Loews CEO James Tisch, Apollo cofounder Josh Harris and Interactive Brokers founder and billionaire Thomas Peterffy.
A separate source familiar with the company told TheWrap that in addition to the $38 million, The Messenger also obtained a “cash injection” of $5-$8 million from an existing investor in November.
The platform has strongly rejected reports it is tanking financially and plans to close, stating that it has already secured more money to stay afloat.
But as 20 journalists were laid off this week, there was an internal panic among staff following a flurry of negative reports about the site’s future.
One insider told The Wrap that staff began trading panicked messages on its internal Slack channel, demanding reassurances from its leaders and a town hall meeting.
Finkelstein agreed to set up Zoom calls with each of the site’s departments and verticals. The Wrap is told that those meetings have begun, and the staff has ceased posting anxious messages about a potential sale or further layoffs on Slack for fear of further leaks.
The drama follows The Messenger president Richard Beckman’s announcement of his exit on Jan. 2 from the company on LinkedIn following a personal health scare.
“Back in November, I had advised Jimmy Finkelstein of my decision to step down based on short-term health issues I have endured this past year and will be subsequently retiring from the corporate world at the end of this month,” Beckman wrote.
“I will be helping with the transition this next few weeks then watching and cheering from the sidelines as my colleagues continue to pursue, with great passion, their noble mission to bring balance back to the newsroom.”
A spokesperson for The Messenger declined to discuss fundraising, but referred TheWrap to a previous statement: “In November, Comscore reported that The Messenger generated 88 million page views in only seven months, which puts us ahead of many of our competitors.”
Comscore reported 11 million unique visitors to The Messenger in December.
“We anticipate that our traffic will continue to increase substantially at a time when most publications are seeing a sharp decrease,” the statement also said.