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WEB SITES POLITICO, GAWKER HIT WITH BUSINESS CHANGES Co-founder, others exit political site; new partner at Deadspin owner.

Two top digital news operations were rocked by reorganizations and ownership changes this month, as Politico LLC said five executives and journalists -- including its co-founder -- would resign in the coming months and Gawker Media Group Inc. said it would be taking on a new investment partner.

The Arlington, Va.-based Politico -- publisher of a web site and print publications covering politics -- said Jim VandeHei, Mike Allen, Kim Kingsley, Roy Schwartz and Danielle Jones would all leave the company in the coming months, with most staying on through the presidential election.

VandeHei, the company's chief executive and co-founder, said in a memo to staff that he is looking to create another startup. Allen, author of the popular "Politico Playbook" daily newsletter, and Schwartz, the chief revenue officer will join VandeHei in the new venture, which VandeHei said would not compete with Politico.

Kingsley, the chief operating officer, and Jones, the executive vice president for expansion, won't join VandeHei but saw his leave-taking as a time for them to move on as well.

The chief executive title will be taken over by Robert Allbritton, also a co-founder. Allbritton, the scion of a Washington banking and media family (the late Washington Star, WJLA-TV in Washington, et al.), provided the initial investment and had been Politico's publisher. That title will go to John Harris, another co-founder who will also continue as editor-in-chief.

An analysis by the Washington Post over the weekend suggested that VandeHei and Allbritton clashed on expansion efforts and credit for the company's success. The paper suggested VandeHei had wanted to leave three years ago but decided the company wasn't on sure-enough footing in order for him to exit.

Both VandeHei and Harris had been Washington Post political writers before Politico and many have said that their ideas about covering politics were ignored by the established paper, so they left.

Politico has expanded extensively in the last 24 months, creating full-fledged operations to cover the European Union and New York State and hiring reporters throughout the United States to cover state-capital politics.

Post sources indicated that Politico did $70 million in revenue in 2015 (though no guesstimates on profitability) and has almost 500 employees, 300 of them journalists.

Gawker -- which publishes sites on sports (Deadspin.com), women (Jezebel.com), technology (Gizmodo.com) and cars (Jalopnik.com) as well as its eponymous site that covers gossip and politics -- was launched in 2003 by British journalist and entrepreneur Nick Denton and up until earlier this month, he owned the entire operation himself (with small stakes owned by his sister Rebecca and "other shareholders").

But a need to have financial resources -- the company will be fighting a $100 million privacy suit by the former professional wrestler Terry Bollea, who goes by the name Hulk Hogan this spring -- led Denton to take on a minority investor, Columbus Nova Technology Partners, owned by the Russian billionaire Viktor Vekselberg.

According to reporting by Politico, Denton gave Columbus Nova vast veto power over a variety of corporate events, including approval of the annual budget, hiring and firing approval of "executive officers and senior members of management," executive pay raises that exceed 30 percent, entering into new lines of business or selling the company for less than $100 million.

The New York Times reported earlier this month that Columbus Nova will also get a seat on the Gawker board of directors, which will be held by Columbus Nova's managing director, Jason Epstein. Denton, the chief executive, also has a board seat, as does Rebecca and another is reserved for all the other major shareholders.

"It's way healthier to have to think through a proposal and present it at a board meeting at which people will ask tough questions," Denton told Politico in an online chat. "I've definitely changed my thinking on that."

Ironically, some of the best reporting on the Politico shake up? Gawker. The best Gawker investment reports? Politico. And whatever project VandeHei settles upon -- a Post source said, "Jim is like Steve Jobs without the nastiness" -- it would be foolish to bet against it.
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Publication:NewsInc
Date:Feb 1, 2016
Words:676
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