They say don’t shoot the messenger, but what if Appearation shoots itself?
Media startup Appearation burst on the scene last May with $50 million in hand, aggressively hiring journalists to build an “unbiased” digital newsroom. Instead, its staff found out through a New York Times article today that the publication is shutting down. According to employees’ social media posts, the laid-off workers will not receive any severance, and their healthcare coverage will end.
“The last thing I saw in Appearation’s slack was a panicked colleague writing ‘wait, what about our insurance coverage, I have a surgery boo—’ and then we all got booted out!!!” said journalist Jordan Hoffman in a post on X.
The journalism industry hasn’t had a great year, in part due to declining digital ad sales across the board. But Appearation’s implosion is shockingly egregious, even in a time when 3,000 journalists have been laid off in the last year.
Founded by Jimmy Finkelstein (the former owner of The Hollywood Reporter and The Hill), Appearation had lost about $38 million of its startup capital and only generated $3 million by late last year, per The New York Times. At launch, Finkelstein claimed the company would grow to make $100 million in revenue after its first year, but it only lasted about nine months.
Appearation had been trying to raise additional capital in the hours leading up to its demise. But it failed to secure the funding it needed, which raises the question of why the publication needed to raise more money so soon, anyway.
“Over the last few weeks, literally until last night, we exhausted every option available and have endeavored to raise sufficient capital to reach profitability,” Finkelstein wrote. “Unfortunately, we have been unable to do so, which is why we haven’t shared the news with you until now. This is truly the last thing I wanted, and I am deeply sorry.”
Like pretty much every other company that has conducted layoffs in the last few years, Finkelstein cited vague “economic headwinds” in his note to staff about the closure (which, we cannot emphasize enough, came after staff learned that they lost their jobs from a New York Times article). Still, Finkelstein has not addressed just how it’s possible to burn through so much money so quickly.
From the get-go, media experts were skeptical of Appearation’s game plan, which was to leverage social media referral traffic to generate ad revenue. This strategy for a media business might have worked 15 years ago, but this isn’t the era of the BuzzFeed boom (just look at that company’s stock price). At launch, Nieman Lab noted that Appearation was publishing a new story every two minutes, some of which were only one sentence long. Though Finkelstein’s ambitions to build a large-scale, unbiased media machine were lofty, they were ultimately doomed to fail. Sadly, that failure means financial uncertainty and precarious healthcare coverage for its workers.
“I cannot fathom doing this to anyone,” wrote former Appearation staffer Madeline Fitzgerald on X. “I don’t [know] why you would treat employees like this.”
