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Salon Media Announces $5 Million Sale, 'Bankruptcy and Liquidation' Threatened If Deal Fails
Salon Media says they have reached an 11th hour deal to sell the company and its flagship property Salon.com for $5 million. In an SEC filing, Salon also revealed its position was dire and that it would face imminent "bankruptcy and liquidation" if the deal should fall through.
[...] The company buying Salon was named only as Salon.com LLC and appeared to be getting an even better deal than the top line figures first suggest. To complete the sale, the buyer need only pay $550,000 at closing, with an additional $100,000 left in an escrow account. The filing also showed that a deposit of $500,000 had already been paid.
[...] Though it was once a powerful force in the early days of internet blogging and a prominent incubator of talent, the website has fallen on hard times in recent years. On May 3, the filing revealed, CEO Jordan Hoffner departed the company. Salon's longtime chief financial officer, Elizabeth Hambrecht, also jumped ship last October.
[...] The company's troubles, however began long before and were documented in detail in a 2016 Politico Magazine story, which revealed that for years Salon — deeply unprofitable — had been kept afloat by elderly benefactors, John Warnock, a co-founder of Adobe, and Bill Hambrecht a venture capitalist. The two are now 78 and 84 respectively.
"Because Salon has run deficits for almost every quarter since it was founded, the company has relied on regular interest-free cash advances from Warnock, chairman of Salon's board, and Hambrecht, a board member," Politico wrote at the time. "From Salon's founding until the end of 2015, the most recent data available, Warnock and Hambrecht have given the company nearly $20 million in cash advances, and Warnock also personally guaranteed a $1 million line of credit."
(Score: 4, Interesting) by The Mighty Buzzard on Wednesday May 15 2019, @11:01PM (5 children)
Who would have thought that tiny little SN was that much more profitable than Salon? Well, besides everyone on the planet who puts fiscal reality ahead of ideology, I mean.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Wednesday May 15 2019, @11:19PM (1 child)
Can you call it profit when SN is a non-profit corp?
I think (but have no reference) that, "SN has a small surplus to re-invest on internal development", will keep you out of trouble.
(Score: 5, Informative) by The Mighty Buzzard on Thursday May 16 2019, @12:09AM
Technically, we're a PBC. Which is to say a for-profit corporation whose primary purpose is public benefit rather than shareholder benefit. Which more or less means we're not legally obligated to make decisions based on what would best line NCommander and matt_'s pockets. Anything we take in above and beyond the costs of keeping ourselves running goes into the bank account where it sits for a rainy day. I doubt we could currently even buy every registered user a beer with it but any profit is a whole lot more profit than Salon managed.
My rights don't end where your fear begins.
(Score: 1, Informative) by Anonymous Coward on Wednesday May 15 2019, @11:50PM (2 children)
Are you trying to troll here?
(Score: 3, Touché) by The Mighty Buzzard on Thursday May 16 2019, @12:10AM (1 child)
Nah, just a little light-hearted snark.
My rights don't end where your fear begins.
(Score: -1, Offtopic) by Anonymous Coward on Thursday May 16 2019, @12:30AM
Ah, so bird brain being true to himself. Mad props yo, gotta respect a playa who stays true no matter how doo.