Last Friday, Joe Ricketts, the billionaire founder of Ameritrade, announced he was shutting down his popular local news sites, Gothamist and DNAinfo.
The announcement came just a week after 25 Gothamist employees decided to form a union, sparking debate over whether the decision was driven by financials or politics.
The answer: partly financials…
DNAinfo and Gothamist, both owned by Ricketts, collectively covered stories in 5 US cities, through a local lens.
But local journalism has long struggled to find a sustainable business model in the digital age — and despite pulling in 9m visitors per month, the two sites never turned a profit for Ricketts.
… But mostly, politics
Ricketts has long been anti-union, going so far as to post a tirade on his personal blog, claiming that “unions promote a corrosive us-against-them dynamic that destroys the esprit de corps businesses need to succeed.”
So, when (likely underpaid) Gothamist writers formed one at the tail end of October, a stubborn Ricketts decided it was better to shutter the entire operation rather than work out a deal.
The companies’ 115 writers and editors will be paid 3 months’ full salary, plus 4 weeks of severance pay — a pithy gesture considering that they essentially lost their jobs over a power move.
Get the 5-minute roundup you’ll actually read in your inbox
Business and tech news in 5 minutes or less