Hyperlocal news sites consolidate, close in the face of low ad revenue
Published: August 28, 2013
It appears that Patch.com news websites in Arbutus, Broadneck, Eldersburg, Essex-Middle River, Fallston, Glen Burnie, Hunt Valley-Cockeysville, North Baltimore, Perryville, and Pikesville will be changing hands or, more likely, going dark soon.
Hundreds of Patch.com writers and editors across the country were fired on Aug. 16, with many more told they would be let go on Oct. 15, insiders tell City Paper. It was part of a restructuring that AOL CEO Tim Armstrong announced as he tries to make the company profitable by year’s end.
Bought by AOL five years ago, after Armstrong took that company’s helm, Patch was supposed to be a nationwide amalgam of “hyperlocal” news sites; Armstrong touted Patch.com (which he founded in 2007) as the core of the AOL brand. The idea was simple: get mostly young, ambitious reporters to cover small towns and neighborhoods like never before, plus compile and maintain a comprehensive listing of every local business, government, and cultural institution, and watch the traffic grow. Ads would cover the expense, and AOL—with no depressing “legacy costs” like pensions or presses—would quickly grow to dominate local news coverage nationwide.
The company rolled out fast, hiring hundreds of reporters as other publications shed them. In 2011 AOL paid $315 million for the Huffington Post in an attempt to cement the brand as an online news flagship.
And the Patch sites did break news. But the ad sales did not come in the volume needed. TechCrunch (another AOL-owned website) estimated that Patch would have to approximately triple its ad sales, to about $110,000 per day, to make a profit even with its reduced head-count.
The fallout was brutal. Two days after Armstrong told Wall Street analysts he planned to reduce the number of Patch sites from 900 to 600, he held a conference call for more than 1,000 Patch employees to detail his plans. Billed as a pep rally, the call took a bizarre turn about two minutes in, when Armstrong fired Patch’s creative director, Abel Lenz, ostensibly for taking photos of the meeting.
“I don’t care what the press says,” Armstrong told the employees just before he fired Lenz. “I don’t care if people leak information.”
Employees who spoke to City Paper pleaded for anonymity because they don’t want to get fired or lose a promised two months of severance pay for leaking information.
Employees were told that about 60 percent of Patch sites would continue as before while 20 percent would be “consolidated” and another 20 percent would be operated until Oct. 15 while the company searched for “strategic partners” to take them over. It was not clear to the Patch employees we spoke to exactly how that was supposed to happen.
At that point, employees still had little idea of their own fate. Insiders who spoke on condition of anonymity say they were emailed a phone number and a code for one of several subsequent conference calls held on Friday, Aug. 16. They would call the number, identify themselves, and be placed in a virtual room with an unknown number of other reporter/editors who shared their fate. “Then someone from HR came on and read a statement,” says one Patch employee. “You could tell they were reading it.”
Says another Patch employee: “It’s not as if they could call us into an office.” Patch does not have local offices; reporters are issued laptop computers and told to work from home or in the community.
Some employees—no one is quite sure how many—were told they were no longer employed. Another group got word that they were being employed until Oct. 15. The rest were given the news that they were staying on—but in many cases not at their home website.
Marge Neal, for example, helms the Essex-Middle River Patch. But this week she was listed as the editor of the Parkville Patch. When City Paper emailed Neal to ask about the change, she said she had forwarded the inquiry up the corporate chain of command.
Patchers say the Bel Air site was doing very well with readers and advertisers under editor Kirsten Dize but that she was laid off anyway. Anthony Duignan-Cabrera, apparently the new editor of the Bel Air Patch, had three posts to his credit as of Wednesday morning,
The total layoffs were estimated at 42 percent of Patch’s 1,200 or so local journalists.
Local Patch.com sites expected to soldier on include Aberdeen, Annapolis, Anne Arundel, Catonsville, Bel Air, Bowie, Columbia, Crofton, Dundalk, Edgewater-Davidsonville, Elkridge, Ellicott City, Havre de Grace, Lutherville-Timonium, Odenton-Severn, Owings Mills, Parkville-Overlea, Perry Hall, Severna Park, Towson, and Westminster.
> Email Edward Ericson Jr.