TheStreet Lays Off 10 Staff in Third Round of Cuts in 14 Months

Last week TheStreet (NASDAQ: TST), a financial news and information publisher, announced it was laying off 10 editorial employees in its third round of

Subscription News: TheStreet Lays Off 10 Staff in Third Round of Cuts in 14 Months

Source: TheStreet

Last week TheStreet (NASDAQ: TST), a financial news and information publisher, announced it was laying off 10 editorial employees in its third round of layoffs since October 2016, reports Talking Biz News. Founded by financial expert Jim Cramer, TheStreet is shifting its focus to its paid products after experiments with video and branded content failed to meet expectations.

Talking Biz News reports that the following TheStreet staffers have been laid off:

  • Sarah Solomon, social media journalist
  • Ross Kenneth Urken, personal finance editor
  • Leon Lazaroff, deputy managing editor and senior writer
  • Keris Alison Lahiff, digital media reporter,
  • Gabriel Kinder, executive producer for social media and video

The news comes just weeks after the company reported its third quarter financials for 2017 as well as satisfactory contract negotiations with Cramer.

‘This is the second consecutive quarter that we have had net income,’ said president and CEO David Callaway in a press release. ‘Our turnaround plan has taken hold. With the confidence of our newest investor, 180 Capital, and finalized contract negotiations with Jim Cramer, we are set for continued growth on the top and bottom line of the business.’

Subscription News: TheStreet Lays Off 10 Staff in Third Round of Cuts in 14 Months

Source: TheStreet

For the third quarter, TheStreet reported total revenue of $15.3 million, compared to $15.2 million for the same period last year. B2B revenue of $7.9 million, an increase of $0.7 million, or 9 percent, over the same period last year, represents approximately 52 percent of total revenue. B2B revenue for the quarter was $7.4 million, down $0.6 million over the same period last year, representing approximately 48 percent of total revenue.

Other highlights for the third quarter quarter include:

  • B2B revenue growth was partially offset by declines in B2C revenue, primarily from premium subscription products.
  • The gain in B2B revenue came from higher BoardEx subscription revenue, which increased by $0.7 million, or 29 percent, resulting from a 10 percent increase in the weighted-average number of subscriptions and a 19 increase in the average revenue recognized per subscription.
  • RateWatch, also B2B, subscription revenue increased $0.1 million, or 8 percent, due to a 12 percent increase in the average revenue recognized per subscription partially offset by a 4 percent decline in the weighted-average number of subscriptions.
  • B2B revenue from The Deal decreased $0.2 million.
  • The decline in B2C revenue was primarily due to a 14 percent decline in the weighted-average number of subscriptions offset by an increase of 2 percent in the average revenue recognized per subscription.
  • Average monthly churn of 4.22 percent of B2C subscriptions was an improvement over 4.79 percent for Q3 2016.
  • B2C licensing and syndication revenue of $296,000 was down 8 percent over Q3 2016.
  • B2C advertising revenue grew 2 percent, compared to Q3 2016, due to increased sales to existing customers via marketing and CPM.
  • GAAP net income of $0.02 million, or $0.01 per share, compared to net loss of $1.2 million or $0.03 per share for Q3 2016.
  • Cash, cash equivalents, restricted cash and marketable securities totaled $26.1 million, an increase of $2.7 million from December 31, 2016.
  • Operating expenses totaled $15.0 million, down $1.1 million, or 7 percent, over Q3 2016.

The same day third quarter financials were released TheStreet also announced its new four-year agreement with Jim Cramer, effective January 1, 2018 through December 31, 2021. Cramer is the company’s founder, financial markets commentator and a director.

‘The Company greatly benefits from the many contributions of our founder, Jim Cramer, the most recognized personality in financial media,’ said Callaway in a press release. ‘Jim’s continued commitment to TheStreet is a strong validation of the positive direction the Company is headed. Having Jim here and motivated to grow our consumer business will allow the company to maximize its potential and return value to our shareholders.’

Cramer also commented on the agreement:

‘I am thrilled to re-sign with the company I founded over 20 years ago. I truly believe that TheStreet has a bright future ahead of itself and I look forward to contributing to its success for years to come,’ Cramer said.

As a result of the layoffs, TheStreet will have to count on the remaining staff, including newly-hired personal finance and retirement columnist Robert Powell from USA Today, reports Digiday. When he was hired in September, TheStreet announced it would be launching a new subscription retirement product.

Insider Take:

It is no secret that publishers across the board are struggling to make ends meet as digital publishing becomes more popular and publishers try to find a business model that supports their work. In this case, TheStreet made strategic choices to focus on video and branded content that didn’t pan out. It is unclear if that was due to how the plans were executed or supported, appropriateness of those media for their audience, or if the company hadn’t given the programs enough time to really take off. Reporting net income for the third quarter is a good start, but TheStreet will need more than just a couple of positive, consecutive quarters to achieve strong results in 2018.

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