Can The Daily Beast Be Saved?

 

Javier Muñoz for BI

Within days of taking over The Daily Beast last April, Joanna Coles, the news site's co-owner, was on an editorial tear.

Coles posted on X about hiring a "senior Lauren Sánchez correspondent" to cover Jeff Bezos' fiancée and proposed a "chief fruit and vegetable correspondent" to write about Meghan Markle's new lifestyle brand, American Riviera Orchard. She pitched a piece about Donald Trump farting in court and another that asked whether protesting was "the new sex for Gen Z." (A spokesperson for The Daily Beast said neither story was assigned.) A third idea — a list of celebrities who had pooped themselves — was written by an intern who refused to put her name on it.

Over the course of its 16-year existence, the Beast earned a reputation for its scrappy reporting. The site balanced tabloidy, lowbrow scoops — Gov. Ron DeSantis of Florida once ate pudding with his fingers — with more-serious pieces on Robert Mueller's Russia investigation or on the pro-life US Senate candidate Herschel Walker financing his girlfriend's abortion. (Walker denied this.)

None of this meant the Beast made any money. The site's other new co-owner, Ben Sherwood, told staff at an all-hands meeting in July that the outlet had been on track to lose $9 million in 2024. Barry Diller, the billionaire chair of the media conglomerate IAC, had been "hours out" from selling the Beast to private equity, Sherwood said.

Instead, Diller hired Coles, 62, the famed former editor in chief of Cosmopolitan magazine, and Sherwood, 60, the former president of ABC News. The pair walked in ready to revamp a newsroom where, in their view, reporters and editors "had been at a five-star hotel too long," someone who interviewed with them for a job said. For Coles, that meant making the Beast more fun. "I certainly wasn't reading it on a regular basis," she told The New York Times in November, adding that an editor at another publication had called the site "the boring avatar of the resistance."

"I thought he summed it up in one," she said.

For a left-leaning newsroom full of seasoned beat reporters and digital natives, "Boanna" was a shock to the system. The culture clash was exacerbated by a round of buyouts and layoffs, including the firing of the editor in chief Tracy Connor, that gutted the staff. All of it played out in gossip columns and on media Twitter. It was the type of juicy workplace implosion that would have made for a great Daily Beast story.

In a July meeting with the politics team, Sherwood said the layoffs were a necessary step in "rightsizing" a broken business. To some extent, the plan has worked. In a December podcast interview, Diller said Sherwood and Coles had turned a profit two quarters in a row and predicted that The Daily Beast would come close to breaking even in 2025. Sherwood said that in the final six months of 2024, revenue grew by 76% compared with the same period the prior year. "We're staying rigorously focused," Coles told Business Insider in January. "Everything has to go through a filter of: Is this about power? Is it about people? Is it about politics? If it's not about that, we're not interested."

Joanna Coles became co-owner of The Daily Beast in April 2024, along with former ABC boss Ben Sherwood.

Roy Rochlin/Getty Images

Sherwood, who's based in Los Angeles and flies into the New York office once or twice a month, told BI that in the coming year, he and Coles would invest in "more original content, audio, video, and technology and tools for a more engaging experience for our readers."

In a December 17 all-hands meeting, the Beast's director of product management announced that it was aiming to launch a new lifestyle vertical by the third quarter. Coles, meanwhile, will headline a new "Beast Power 100" event series this year and next in partnership with a tech sponsor. During the all-hands, The Daily Beast's president and chief operating officer, Keith Bonnici, said the event was part of a plan to build "a business around Joanna," leveraging Coles' relationships and connections to grow the Beast brand. The event series was a "seven-figure deal," Bonnici told staffers. "Very excited about that. Clearly I like money, if you haven't figured that out."

Everything has to go through a filter of: Is this about power? Is it about people? Is it about politics? If it's not about that, we're not interested. Joanna Coles

Since Coles and Sherwood have taken over, the Beast is light on the hard-hitting journalism it was once known for; instead, the site features aggregation and opinion columns from Coles' famous acquaintances, including the "Sabrina the Teenage Witch" creator Nell Scovell and the "Last Week Tonight" writer Jill Twiss. Coles said she and Sherwood had been "very clear" about their desire to hire more investigative reporters and publish more original journalism.

Some industry executives are sympathetic to the challenge Coles and Sherwood face: finding a viable business model for an outlet that's never been profitable and has seen a decline in audience traffic over the past two years. "I often find writers have been kept in the dark or don't want to acknowledge the business is super shitty and hanging on by a thread," one media executive said.

Others are skeptical that the pair will be able to solve the dilemma that plagues most media companies: how to publish quality journalism while also making money. "I think you're dealing with two executives" who "come from the most traditional forms of media in existence: print magazines and broadcast television," an industry executive who's worked in media for almost 30 years said. "That skill set is completely inapplicable to what they're trying to do. It would be like taking someone managing US Steel and saying, 'I'm putting you in charge of OpenAI.'"

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IAC launched The Daily Beast in 2008 with the former Vanity Fair editor in chief Tina Brown at the helm. Its goal, as Brown wrote years later, was to combine "tabloid raciness with sophisticated wit." She added that she relished her role as "Den Duchess to a group of wildly talented millennials having late-night office romances and lots of PG-13 entertainment." The site itself reeked of urgency, with splashy headlines in dramatic black and red.

The Daily Beast's New York City office is in the IAC Building.

VW Pics/VWPics/Universal Images Group via Getty Images

The Beast hit plenty of road bumps, including a short-lived merger with Newsweek that precipitated Brown's 2013 departure. After her exit, editorial leadership passed to John Avlon, the CNN political commentator, then to Noah Shachtman, an editor of the publication Foreign Policy who went on to become the editor in chief of Rolling Stone.

Though it never made a profit, the Beast became known for punching above its weight. It attracted top talent, especially on the political desk: Spencer Ackerman, Sam Stein, and Olivia Nuzzi, who has since become Beast fodder herself. Brandy Zadrozny's reporting on Vice helped shape the narrative around the beleaguered outlet, and after political reporter Roger Sollenberger's Herschel Walker scoop, the politician lost the Senate race. Shachtman, who ran the Beast from 2018 to 2021, said that at its best, the site holds powerful people to account. "I feel like that's needed," Shachtman told BI, "especially now when so many other outlets are hiding under the rug."

When they arrived at the Beast, Coles and Sherwood expected to be met with excitement, according to the Times. But the staff was skeptical from the start. "There was no honeymoon period," one former staffer said.

"It was basically them laying out the argument that we weren't working hard enough, our leadership had done everything wrong monetarily, the reporters were lazy, the editors were stupid, and it was their way or the highway," another former staffer said.

Sherwood said his and Coles' critique "was never personal."

"It was very hard for employees to hear the truth that had never really been shared with them before: the Beast was on track to lose more than $36 million over the next few years. Traffic had plummeted double digits. Subscriptions were collapsing. The tech and website were broken," Sherwood said. He and Coles, he added, were trying to figure out how to turn things around.

At times, things got tense between them and their inherited staffers. A few months into her tenure, Coles held an hourlong, expletive-laden meeting with the politics reporter Jake Lahut, who was on vacation when Trump was shot and didn't file a story. "I used to hire a car and drive in godforsaken places" and "not sleep for 24 hours," Coles told Lahut, who worked at BI from 2020 to 2022. "You are working in much, much nicer conditions." Coles repeatedly questioned whether Lahut had what it took to be a journalist. A few days later, Lahut resigned.

Justin Baragona, a former Beast media reporter, said that in pitching staff on what this new Daily Beast should look like, Coles kept saying she wanted to go back to a "smarter version of tabloid journalism, back to the Tina Brown days."

"I was like, 'You want to go back to the late aughts, which didn't work?'" Baragona told BI in August.

During Coles and Sherwood's first all-hands meeting on April 15, Baragona asked how they knew their Daily Beast wouldn't end up like The Messenger, an online publication founded by The Hill's Jimmy Finkelstein. The site launched in May 2023 with a $50 million investment and folded less than a year later, laying off 300 employees and earning a reputation, per the Times, as "one of the biggest busts" in online news. It's normal for a staff full of reporters to press their bosses during meetings, but Baragona said Sherwood seemed offended by the question. "I get a little bit fired up when we get included in the same sentence" as The Messenger, Sherwood responded at the all-hands. "That's not what we're looking to do."

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To many of the more than 20 former and current staffers who talked to BI, Coles seemed like a holdover from the world of glossy magazines. In the middle of the first all-hands meeting, she was interrupted by her cellphone ringing. "Oh, it's Kara Swisher," Coles said, referring to the podcast host. "I'll call her back." At another point during the meeting, she recalled the night of the 2016 election, when a colleague's husband invited her to come sit in the NBC News control room. There were two other people there, she said: Lorne Michaels and Steven Spielberg.

Once, Coles asked Tracy Connor, then the editor in chief, to point her to a "reporter who covers frivolous things." Connor replied that the Beast did not cover frivolous things but that Coles should describe the story she wanted and Connor would do her best to assign it. Coles, it turned out, wanted a journalist to investigate Gov. Kristi Noem's budget for hair, makeup, and manicures. "That's just Joanna," one former staffer said. "She didn't mean to demean what we do. That's her tabloid Daily Mail sensibility." But "a lot of the issues," the former staffer added, were about Coles and Sherwood "severely misreading who we were."

"You'd think they would've come in and been like, oh goody, we've got the keys to this kingdom to start some real trouble." a former editor said. "But the first thing Joanna does is a Lauren Sánchez correspondent. You couldn't have shown less of an understanding of what The Daily Beast was than that."

Within two months of coming on board, Coles and Sherwood fired Connor, a low-key New York Daily News alum who'd earned reporters' respect, and replaced her with the former Daily Mail editor Hugh Dougherty. "He's an absolute savant when it comes to news," Coles told BI. "And he's got a sort of Scottish rigor. He's in the office at 8, and he rarely leaves before 8."

Dougherty seemed like an awkward fit for the newsroom's culture. Early in his tenure as executive editor, he criticized a photo editor over an illustration he didn't like, calling them "brain-damaged," according to multiple people who heard about the incident contemporaneously. He also called The Daily Beast's union a "plague" and a "cancer," two former employees said.

Sherwood and Coles hired the tabloid veteran Hugh Dougherty, left, to be The Daily Beast's executive editor and David Gardner, right, to be its chief national correspondent.

Leigh Vogel/Getty Images for Uber, X and The Free Press

In July, Dougherty was chatting with writers in a weekend Slack channel. One reporter mentioned recapping a Fox News interview, and Dougherty replied that he hadn't realized the interviewee was on with "Gay Trowdy" — seemingly poking fun at former Rep. Trey Gowdy, now a Fox host. Dougherty declined to comment on these incidents.

Staffers felt like they were increasingly being asked to cross ethical lines. Coles, who is on the board of Snapchat, expressed interest in negative stories about TikTok, its rival, one former staffer said. Former employees described three instances in which they were encouraged to use Chris Vlasto — a pal of Sherwood's who worked at ABC News and was contracted by the Beast to do communications — as an anonymous source in a story; in two of these cases, the former employees said this directive came from Sherwood.

Vlasto told BI that, as a longtime employee of ABC, he'd offered to share contacts and phone numbers with reporters. He said he never volunteered himself to be quoted anonymously. Sherwood added that Vlasto is "a fantastic resource for any reporters seeking to be smarter about topics related to the television industry or ABC News."

On occasion, Coles herself could be loose with the facts. On MSNBC's "Morning Joe," she said she thought Trump was microdosing, leading the host Jonathan Lemire to clarify that there was no evidence that Trump was taking drugs. And on a September episode of Ari Melber's show, she said that people had already begun early voting in North Carolina. After the show wrapped, her co-panelist, Molly Jong-Fast, pulled Coles aside and explained that early voting wouldn't start until mid-October, someone familiar with the interaction said. They added that Jong-Fast warned Coles about being so egregiously wrong on TV.

(The spokesperson said Coles was clearly joking with regards to Trump microdosing and said it's "ridiculous" to say she's loose with facts given her distinguished career.)

Some reporters worried that Coles' bravado would hurt their credibility — not to mention their relationships with key sources. During an April visit to the Washington, DC, bureau, Coles suggested that the Beast's Washington reporters write about the fattest members of Congress and which lawmakers were on Ozempic. And after Puck reported that the ABC News chief Kim Godwin said that Black people don't watch the news, Coles assigned reporters to "call every famous Black person in the news," including Robin Roberts and Don Lemon, to ask them to respond to the claim. The story didn't run.

Coles said that many of her story ideas were attempts to start conversations among staffers. "I come from a background where people argue about ideas," she said. "It's about understanding what an idea is and how you pursue it, and not being afraid of saying things out loud and not being afraid of being judged."

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When the Beast first came on the scene, digital media still seemed like a good financial bet; the same year it launched, The Huffington Post was valued at $100 million. Digital publishers could count on revenue from social media sites like Facebook, brand-name advertisers, and venture capitalists hoping to recreate the HuffPost magic. These days, that has all but disappeared. Meta, which once built tools that advantaged sites like BuzzFeed, has pivoted away from hard news, and Google's new emphasis on AI-generated answers threatens to upend the digital ad market even further.

In 2022 and 2023, Diller started looking for a buyer for the Beast, meeting with people like Janice Min of The Ankler and BI's founder Henry Blodget. While there was substantial interest from private equity, Diller preferred not to see the outlet stripped for parts. He wanted to give the site a fighting chance, said someone privy to conversations about its future. For Diller, that meant "having a star at the helm," the person said. (Diller declined to comment.)

Barry Diller, pictured with his wife, the fashion designer Diane von Furstenberg, wanted to find a buyer who would breathe new life into the Beast, people close to him said.

Marleen Moise/Getty Images

Coles and Sherwood seemed to have everything Diller was looking for. They'd had long careers and were well-known names in their respective fields. The Beast was a chance for them to get back into the newsmaking game.

Coles started as a newspaper reporter in London (one of her early scoops famously came from confronting someone while they were on the toilet) before moving to the States. She became the editor in chief of Cosmopolitan in 2012, back when magazines were flush, and then the chief content officer at Hearst four years later. With her frosty pixie cut and treadmill desk, she was a larger-than-life figure at Hearst, "swanning around in full Gucci," as one former Hearst editor put it.

Coles left Hearst in 2018 after Troy Young was appointed president. She continued to executive produce "The Bold Type" — a fictional show about women's magazines based loosely on her time as an editor in chief — until its cancellation in 2021. She tried her hand at various other ventures, including Boudica, a content platform to connect women in corporate America. She collaborated with the Twitch streamer Valkyrae to launch RFLCT, a blue-light-blocking cream that was blasted as a scam because of its lack of scientific bona fides. ("I am confident that if a male gamer had come up with RFLCT he would have been roundly applauded," Coles said in a 2021 statement to The Washington Post defending the product.)

In 2020, Coles partnered with the New York Islanders co-owner Jon Ledecky to launch several special-purpose acquisition companies — investment vehicles popular with celebrities at the time. Four years later, one of the SPACs was charged with making misleading statements to the Securities and Exchange Commission. That same year, investors in the SPACs' parent company sued Coles and other board members, alleging a breach of their fiduciary duty. The SEC charges were settled, with the SPAC neither admitting nor denying the commission's findings; the lawsuit is still active.

Sherwood, an ambitious executive from a well-heeled Beverly Hills family, got his start as a "Good Morning America" producer and worked his way up to the top job at ABC News. He presided over a run of successes at ABC, including leading "GMA" to its first ratings victory over the "Today" show. There were people, a former colleague of Sherwood's at ABC said, who wondered if Sherwood "could be Bob Iger someday." When ABC merged with Fox, Disney kept the Fox TV executives to run entertainment and Sherwood left the company. "Usually when you're replaced at that level you're still a player, you get a production deal and eventually move into another job," a second former colleague said. Instead, Sherwood said, he went the entrepreneurial route and spent the next three years building the sports tech company Mojo, which he sold in 2023 for an undisclosed sum.

Coles and Sherwood had known each other for a few years and would often exchange links and thoughts on the day's news. They'd discussed some sort of journalism team-up and had even come up with a name, Scoop, but didn't get much further. They saw each other as kindred spirits, the latter of Sherwood's former colleagues said. Sherwood, the person added, thought of himself as "this savant" who could speak to middle-American women, much as Coles' Cosmo had.

It was one of IAC's bankers, Jason Rapp, who suggested that Coles and Sherwood speak to Diller together. In their meeting, they impressed Diller with their ideas about what the future of media looked like and how the Beast might fit into that equation. "I wanted something that curated a lot of news out there that wasn't about the end of democracy all the time," Coles told the Times.

Coles and Sherwood spoke Diller's language and existed within the billionaire's rarefied social orbit. Coles and Diller's wife, the fashion designer Diane von Furstenberg, often appeared at events and on panels together and were both cast on season two of "Project Runway All Stars." And Diller had started his career at ABC, where Sherwood came up. One person who knows both Coles and Diller said it probably didn't hurt that Coles was a charismatic blond British magazine star much like his old partner, Brown.

Ultimately, the trio agreed to partner on a joint venture, with Coles and Sherwood taking a 49% equity stake. Actually bringing their vision to life "was like the girls' trip made it out of the group chat," one Daily Beast reporter said.

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It wasn't long before the leaks began. Articles in New York Magazine, The Hollywood Reporter, and The Washington Post quoted disgruntled Beast staffers describing Coles' story ideas as scattershot. Sherwood swept in to play good cop, holding a follow-up meeting with the DC team on May 1 in which he seemed to try to defend Coles. "We're not doing a 180; we're not here to cover Donald Trump's farts," he assured the politics team, saying that Coles' ideas hadn't been real assignments. "This is not Jimmy Finkelstein," he said. He and Coles weren't "trying to make you guys write 70 articles a day."

Around the same time, Coles and Sherwood began gearing up for layoffs. But The Daily Beast's union was in the middle of negotiating a new contract, which meant the co-owners couldn't immediately make changes. Instead, the union proposed presenting the staff with voluntary buyouts. As things in the office grew tenser, more people decided to leave. By the time Connor's exit was announced in June, 12 people had applied for a buyout; a few days after Dougherty took over, 13 more people joined.

During buyout negotiations, Coles contacted multiple people directly to ask them to stay on, offering them more money and better positions. Three employees eventually rescinded their requests. In the end, 22 members took a buyout, resulting in $1.9 million total in cuts. Management also laid off eight nonunion employees. When the restructuring was through, the Beast was down to 13 unionized staffers.

The former ABC boss Ben Sherwood told the Beast's politics team in May that he and Coles weren't "trying to make you guys write 70 articles a day."

Alberto E. Rodriguez/Getty Images for Variety

Even as Coles and Sherwood downsized, they were eager to attract new talent. One reporter said the duo described themselves in the interview process as "pirates on a pirate ship in the industry, going to storm the beaches" — phrasing that seemed cribbed from Logan Roy's speech to the ATN staff on "Succession."

This same reporter described Coles as saying she wanted to hire Brits because she thought they were "smarter than Americans." She and Sherwood tapped Martin Pengelly — a Guardian journalist who'd recently broken a story about Kristi Noem, South Dakota's governor, killing her dog — to run the DC bureau. Pengelly expected to take charge of a competent, well-oiled newsroom, someone with knowledge of the situation said. Instead, he found himself short-staffed. Two of his congressional reporters had just left, and two more were on leave, giving him a team of one. But he was still under pressure from Sherwood and Coles to churn out stories.

The last straw, people said, was when Coles told Pengelly to use an online test to determine whether Joe Biden had Alzheimer's for an article. After five weeks at the Beast, he quit without another job lined up. (Coles declined to comment on this specific assignment. "We want to be an independent news organization," she said, "and it was very clear there was something wrong with the president.")

We're not doing a 180; we're not here to cover Donald Trump's farts. Ben Sherwood to Daily Beast staff

Multiple people said Coles and Sherwood struggled to make hires. Coles told Variety in September that they'd wanted to bring in "big voices" but discovered that "their price was too rich or they weren't going to move the needle in the way we thought." They tried for months to get new names for the politics team, putting out feelers to well-known reporters including Nuzzi, MSNBC's Sam Stein, and the investigative journalist Michael Isikoff. One politics reporter they attempted to hire, Cameron Joseph, went to The Christian Science Monitor instead.

During the December all-hands, Coles told staff that she'd had "a ton of outreach" from people clamoring to join the Beast. In fact, just that morning, a woman had recognized her during a coffee meeting. "I know you; you're Joanna Coles," she recalled the woman saying. "I would love to write for you."

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In one way, Sherwood and Coles have succeeded where no one else has: They've made the Beast financially successful. In November, Bonnici, the Beast's COO, told Adweek that revenue was expected to grow by 30% in 2025. Traffic is up, too. According to the Times, data from the media analytics firm Comscore showed that the Beast had 21.3 million visitors to its site in September, compared with a 13.8 million monthly average in 2023. Coles said the Beast had seen a bump in traffic starting with the June presidential debate, presumably from readers who want to know "what the hell is going on in America." The question is what happens next.

Staffers have continued to leave. In addition to Lahut, the Beast has lost the managing editor Noor Ibrahim, the breaking news editor Rachel Olding, and the breaking news writer AJ McDougall. In October, it lost Roger Sollenberger, and the following month, Mini Racker, one of the few remaining DC staffers, left too. The investigative reporter Kate Briquelet departed in January.

Coles and Sherwood are exploring new ways to make money. In addition to their new lifestyle vertical and event series, Coles told one reporter that she was "very good at spinning this stuff into TV and movies" and that she had plans to partner with Snapchat. The Daily Beast spokesperson said this partnership has yet to materialize.

Sherwood said that even though he and Coles ended 2024 with about 31% fewer employees, the Beast was publishing about 70 stories a day — an increase, the spokesperson added, from the 40 to 50 articles produced before the buyouts and layoffs. Sherwood sometimes contributes to this count himself. Recent stories include a piece on the Menendez brothers' resentencing, as well as one titled "Cute, Cuddly & Commie! D.C. Welcomes 2 New Chinese Pandas" and another with the headline "McDonald's Serves Up the 14-Ounce 'Big Arch,' Its Biggest Hamburger Ever." (Sherwood said he used a senior executive source to land the McDonald's scoop.)

As publications like Vice and The Messenger shutter and layoffs become cyclical, the media industry is struggling to find a sustainable path forward. Outlets such as Puck have managed it by focusing on a specific audience — the power players of Silicon Valley, Hollywood, Washington, and Wall Street — and by charging $100 or more for an annual subscription. The Daily Beast, on the other hand, seems to be focused on traffic — a model that seems increasingly unsustainable as advertisers spend less and less in return for clicks. In a September all-hands meeting, Bonnici said the Beast would eventually need to put time and resources back into investigative journalism to be of value to its audience.

For IAC and Diller, making money is certainly good. Coles said that while she and Sherwood had "complete operational and editorial control," Diller had "been nothing but 150% supportive."

During his December podcast appearance, Diller said Coles and Sherwood wanted to build the Beast "into a real business with substantial profits." He called their plan ambitious but added: "So far, they've gone faster to get it on even footing than I ever thought would be possible. So we'll see."

Multiple people said Diller had held on to the site for so long because he cared about its role as a meaningful news source. "He wants to do things that give him pride in the world — things people in his peer group would read and talk about and respect," one person familiar with Diller's thinking said. The person questioned whether Diller is achieving that with this iteration of the Beast.

For now, though, Sherwood and Coles are getting another shot at media relevance. So far, they've presented a united front. But "I think Ben is more worried than Joanna" about reputational damage, a reporter said. "Joanna is more like: 'Fine, you don't want to ride with us? I don't need you.'"