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New York
CNN
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Executives at Advance Publications are probably popping champagne bottles. However as they sip on their celebratory bubbly they’re now being confronted with some uncomfortable questions.
The S.I. Newhouse-founded media firm, which owns the Condé Nast suite of prestigious magazines and native information shops throughout the nation, netted roughly $2.1 billion on Thursday when Reddit went public on the New York Stock Exchange in a long-awaited blockbuster IPO.
The social media firm, which priced its providing at $34 a share, rocketed 48% on its first day, closing above $50 in a formidable public debut for the 20-year-old message board platform.
It’s fairly a return on an funding for Advance, which acquired the “entrance web page of the web” for a mere $10 million in 2006, earlier than spinning it off in 2011 and permitting others to spend money on the digital discussion board.
The windfall, nonetheless, comes at a notable time for the corporate. Like different media giants dealing with existential headwinds, Advance’s publications have endured a sustained downturn in digital promoting and seen site visitors from social media platforms decline, prompting uncomfortable belt-tightening and scaled-back ambitions.
Condé Nast has for months been engaged in a standoff with its union. The corporate introduced in November that it deliberate to put off 94 staffers, or roughly 5% of its workforce. (It has stated it can preserve working prices in step with the final three years, however that it needs to spend money on completely different areas, necessitating the layoffs.)
Tensions have solely escalated since then. Condé Nast boss Roger Lynch instructed Axios’ Sara Fischer earlier this month that, whereas it missed its income goal, there have been no plans for further layoffs. However the Condé Union stated this week that administration had successfully gone again on its phrase and added one other 5 staffers to its layoff checklist, inflaming already excessive feelings and prompting renewed protests Wednesday outdoors Lynch’s workplace.
Whereas Advance can’t promote its shares for six months, shedding staffers because it reaps billions of {dollars} from Reddit’s IPO would current, at minimal, an optics downside for Condé Nast, which has been bruised in current months throughout union negotiations. The earnings additionally provide just a few uncomfortable questions for the corporate. Will Advance undergo with such cuts whereas it rains money over at firm headquarters? How can Advance count on Condé Nast administration to push by way of with painful layoffs whereas the mum or dad firm experiences a gold rush?
I requested representatives for Advance on Thursday if the $2 billion+ windfall it stood to reap had given it any second ideas on permitting Condé Nast to maneuver ahead with the layoffs. As you would possibly count on, representatives for the corporate weren’t too eager on answering such questions. My a number of emails went unreturned.
However the IPO bonanza has definitely secured the eye of workers at Condé Nast. And it’s positive to be an element because the union continues contract negotiations with administration. Whereas Advance is remaining mum concerning the large sum it has made on its Reddit guess, the union is already talking out.
“The truth that billions of {dollars} in wealth poured into Advance as we proceed to struggle for jobs illustrates the place Condé Nast’s priorities are,” Susan DeCarava, president of The NewsGuild of New York, instructed me. “Administration must cease investing in threats and begin investing within the issues of the employees who energy the corporate’s success.”