A Note on TPM’s Finances and Business During the COVID Crisis

April 3, 2020 8:24 p.m.

We’ve been hearing from many of you asking about TPM’s finances amidst this crisis and what’s happening with us as a company. Each time another publication shutters or announces layoffs, which has happened almost daily for the last two weeks, we hear it more. So here’s an update on our status. I will try to answer the question holistically because there are a lot of moving parts.

The short version is we could be doing a lot worse. In fact, we are cautiously optimistic about our situation. I believe we are in a better position than a lot of other publications, certainly small to medium-sized digital news organizations. Still, we’re a small company. The ad industry is collapsing. And the number of unknowns keeps growing. But as I said, cautiously optimistic.

Here are some details.

There are some major things in our favor.

The first is that all our distribution and consumption is digital. We are (or were until three weeks ago) based in two offices in New York and Washington, DC. But our production can be and currently is remote and can remain so indefinitely. Given the dynamics of COVID-19 lockdowns those are big, big advantages.

Another critical advantage is that over recent years, with your help, we have dramatically reduced our exposure to the advertising industry. That is a good thing because the advertising world is currently tanking or perhaps collapsing. That’s what’s driving the wave of layoffs and closures. There is possibly an additional hit because advertisers are trying to steer away from any content tied to the bleak news of Coronavirus-19 (which is virtually all news), though that’s more anecdotal and uncertain.

Advertising now accounts for a bit more 20% of our revenue. So dramatic declines in advertising dollars will hurt a lot but it’s not existential. As recently as five or six years ago advertising accounted for 95% of revenue. If that were still the case we would currently have no choice but to radically retrench or close down.

So advertising is a challenge but we think a manageable one. The other challenges are one inherent to most small businesses. There’s no corporation or larger entity that backstops our finances. We don’t have huge cash reserves. We don’t have ready access to more capital. We were planning on making progress on the cash reserves front this year after having to draw them down over the recent years as part of transitioning from an advertising-focused to membership focused business model. So much for that! But anyway, money well spent.

As I always have for twenty years, I and my colleague Joe Ragazzo, TPM’s publisher, are thinking through a long list of contingency plans we will have at the ready if things get rougher than we expect. We’re also investigating the various programs in the various rescue bill to see which if any might be appropriate for us.

Well before any of this started we had spent a good deal of time reworking our membership, membership credit and FIN system to do what many of you have long asked for – provide a way to support our work and our mission beyond the cost of your membership.

For years we’ve allowed TPM Readers to purchase ‘gift subscriptions’. These are subscriptions which we then provide to readers who can’t afford a membership. Many TPM Readers now have memberships using these credits. More recently we began the FIN program (Future Is Now). The money that Readers use to purchase FIN credits are designated exclusively for supporting and expanding our reporting staff and each purchase creates a FIN subscription credit which we make available free to any registered student, full-time or part-time. You just have to be registered with an academic institution.

The FIN program concept is this. We were cautiously optimistic about the model we’ve built. But there was so much more reporting we felt needed to be done and that we could do with more reporters. So rather than just building incrementally to hire two or three more reporters over the next few years, if you want to contribute money to help us do this now through FIN then let’s do it. Let’s do it now because the future is now. There’s no time to wait. If anything this has become more urgent.

We wanted to simplify all of this. And we were slated to announce this new simplified program in the first half of March when everything spun out of control. We put it on hold as we redeployed to our homes and tried to make sense of how we do our work in this new reality. But we plan to unveil it next week. Details to come. Basically, if you believe in our mission, want to support it, or now help sustain it over and above your subscription fee, please do. We’ll put it to good use. We’re in a totally changed world. We’re mostly focused on surviving now. But all the same still applies.

More on that next week.

If you’d like to support us during this period, the best way is to become a member. If you’re already a member, please consider upgrading Prime AF, no ads ever, a greatly improved reading experience. Mainly, thank you from all of us. 32,453 of you are paid members. And it is because of you that we are here today and are confident we will be here tomorrow.

One more update. In the early days of the COVID-19 Crisis we announced that we were placing all our COVID content outside the paywall for the paywall for the duration. That’s now virtually everything we’re publishing. Many of you have written in to say how much you appreciate our doing it even if it’s losing us money. But I will tell you: it’s actually not losing us money. Or rather because of the dedication of our readers we have been able to add a modest number of net new members since we made the decision. It was important to us to do the right thing. But I prefer doing the right thing and not losing money because of it. So thank you.

We have been closely eyeing our membership numbers for any signs of indications of deteriorating. But as yet we have not seen any evidence of it. Obviously, the impact of the crisis will deepen over time. But so far the signs have been encouraging.

I hope this is clarifying. Probably I should say we’ll be out of business next week if you don’t send money right away. But that’s not true. Like I said, cautiously optimistic. But your support is more important than ever. If you are in a position to support our work above the price of your subscription, great. We’ll put it to good use. We’ll have more information about that next week. If you’re not a subscriber, please take this opportunity to join us. And if you’re a member, consider upgrading to Prime AF, our no ads ever subscription. You’ll love it and it’s the best way to support our team’s work right away.

Thanks to all of you and we’ll keep you posted with any new developments.

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