A few months after eBay billionaire Pierre Omidyar announced plans to spend $250 million on a brand-new outlet for investigative and other kinds of journalism, venture capitalist Ken Lerer raised a red cautionary flag: A huge wad of cash is not necessarily a good thing; instead, big bucks can smother a startup in the crib.
At the time, last March, the then-46-year-old Omidyar was being heralded as a patron saint of the financially beleaguered newsbiz. The elusive $9 billion mogul and his freshly recruited team of editors and reporters were busy launching The Intercept, an online magazine covering national security issues, with an ambitious scheme to create a series of Webzines devoted to business, the arts, and culture, among other subjects, under the umbrella of a new company called First Look Media.
Yet, today, Lerer’s contrarian warnings, dispensed over a beer in New York’s Soho neighborhood, seem positively prophetic. The news this week that the editor in chief of The Intercept, John Cook, has abruptly quit after only seven months on the job follows the messy departure two weeks ago of bomb-throwing financial journalist Matt Taibbi as he was attempting to launch First Look Media’s digital bizmag, Racket—painting a dispiriting portrait of turmoil and chaos at a once-promising enterprise.
“Having too much money allows you to be extraordinarily unfocused, which is a bad thing,” Lerer told me back in March. “It allows you to gear up too fast, which is also a bad thing. It allows you to think incorrectly that content is the only thing that matters.”
Lerer, a co-founder of The Huffington Post (which was sold three years ago to AOL for an eye-popping $315 million) and a major investor in Buzzfeed and Thrillist among other successful digital properties, continued: “So a small amount of money, but enough money, keeps you laser-focused and allows you to try to do the things you need to do. And it’s pretty clear that because of all the money this guy has given them, they aren’t going to do that.”
Lerer was also skeptical of the splashy media coverage of the fledgling venture, facilitated and encouraged by First Look Media’s publicity team, and stoked by such stars of the left-wing journalistic pantheon as Glenn Greenwald and Jeremy Scahill.
“The best thing you can do is keep your head down, don’t talk about it, start it, work hard, build the house from the bottom up. And when you’re successful, you can say, ‘Hey, look at this!’” Lerer said. “All this pre-publicity is a pain in the butt, and always negative.”
To a few not necessarily sympathetic observers at rival online media outlets, Cook’s and Taibbi’s untidy exits portend a possible implosion of the entire First Look Media project. “The Intercept loses its editor in chief as First Look crumbles,” read a typical headline on the Mashable.com news site. Even New York University journalism professor Jay Rosen—who in October ended an 11-month paid consultancy with Omidyar and First Look Media—tweeted that Cook’s departure is “bad, bad news.” (Rosen declined to comment further.)
"We obviously knew some media types would try to link John's departure to Matt's as a means of depicting us as unraveling, sinking, etc.,” a source at First Look Media emailed The Daily Beast. “Part of that is just a love of gossip, but the bigger part is just the ugly human desire to see others fail, particularly pronounced among journalists when it comes to their competitors and those they otherwise see as a threat.”
The source continued: “All I can do is do is tell you categorically that none of that is true. We feel we're in a better position than ever. All of the prospective candidates we spoke to so far about replacing John have been extremely interested. The Intercept has a large and talented staff who aren't going anywhere, a big budget, significant new stories to break, and now the opportunity to bring in a new editorial leader."
The Daily Beast reached out to a number of First Look Media figures—some of whom are not on staff but are independent contractors—and none would comment on the record.
Cook, who didn’t respond to a message left on his cell phone, is returning to his longtime professional home at Internet entrepreneur Nick Denton’s Gawker Media, overseeing investigative projects; Taibbi—who left First Look Media after “months of contentious disputes with…Omidyar [and other executives] over the structure and management of Racket,” according to a remarkable dirty-laundry airing on The Intercept—has gone back to writing for Rolling Stone.
Other than saying he’s “sad” at the way things turned out, the normally voluble Taibbi has consistently refused to discuss his defenestration. “I really can’t talk about it, unfortunately,” Taibbi told Huffpost Live—suggesting that he’s constrained by one of the strict non-disclosure agreements that Omidyar is said to insist upon for First Look employees (unusual for an operation ostensibly devoted to the journalistic values of openness and transparency).
Indeed, despite his desire to have a big impact on journalism, Omidyar’s instincts do not, at bottom, appear to be motivated by the thrill of telling a great story.
Instead, he’s a brilliant technologist, thoughtful philanthropist and do-gooding idealist who is motivated by a concern for government abuse of power and lack of accountability, the troubling rise of the national security state, and the resulting threat to individual privacy.
A culture clash between Omidyar—who continues as chairman of the virtual auction house, eBay--and his ink-stained employees seemed inevitable, and Omidyar’s sometimes cryptic operating style has worked to aggravate the clash, according to First Look Media and other sources.
“It sounds like he’s a terrible manager,” says a knowledgeable digital media maven who spoke on condition of not being identified. “He tells different things to different people, he resolves matters not by conversation but by putting tasks into a project management software design more akin to technologists and product development people.”
This person continues: “I don’t think he really understood the personality of journalists and how to manage them. They’re different from products people or engineers or sales people. They’re different characters with different incentives. They care more about their freedom from bureaucratic interference and the freedom to write the stories they want to write than the financial success of the business. Great journalists are difficult, and I don’t think many people appreciate that the best journalists are also the hardest to manage. And that’s something that media executives only learn through painful experience.”
The media maven expresses disbelief that Omidyar, who is based in Hawaii, is attempting to oversee a First Look Media diaspora in which his highest-profile hires—Scahill, Greenwald and documentary filmmaker Laura Poitras (the latter two collaborated to reveal the top secret documents stolen by federally indicted National Security Agency whistleblower Edward Snowden)—are based in New York, Rio de Janeiro and Berlin, respectively.
Indeed, Omidyar and Greenwald—who, despite his wish not to take on management responsibilities, has been actively recruiting talent to The Intercept—have still not even met each other face-to-face.
“How can you develop any kind of trust within an organization,” the media maven asks rhetorically, “unless you can look into someone’s eyes?”
The First Look Media source acknowledged: “Of course there's some culture clash inside FLM. There is in almost all news organizations. Corporate managers are always going to approach matters differently to journalists. It took awhile for us to navigate those tensions and reconcile the contrasting approaches, but we have figured out how to work together. There will always be some disagreements, but Pierre is committed to the journalism and the journalists know that, so a healthy environment has been created from the original chaos.”
The source continued: “Sure, Matt and John left—what start-up doesn't have some hiccups and setbacks?—but there's a large, talented staff who is there for the long haul. Those eagerly hoping for the imminent disappearance of FLM are going to be really disappointed.”