The curious case of National Geographic’s layoffs and financials

The dirty secret is that NatGeo needed the money for their endowment. Nothing makes money. Nothing. The only thing holding them together is the channel now, spinning off money so they can be alive.” former Nat Geo executive, speaking to the Guardian

The news was everywhere recently that National Geographic would be laying off staff at the magazine. This comes after September’s news that the magazine would become a for-profit after 21st Century Fox bought 73% of the new entertainment company controlling the magazine and National Geographic’s television and other media properties. Variety initially reported that the new entertainment company would lay off “less than 10%” of its 2,000 employees. Jim Romenesko published notes from National Geographic Society President and CEO Gary Knell which asked staff around the world to make themselves available on Nov. 3 to receive information about the restructuring of the organization. Then, in the largest layoff in the organization’s history, 180 of its staff were laid off, including cuts at the magazine. The Guardian has a great piece about the whole thing: How Fox ate National Geographic.

Screenshot of former National Geographic photo editor Sherry Brukbacher's twitter announcement that she was laid off.
Screenshot of former National Geographic photo editor Sherry Brukbacher’s twitter announcement that she was laid off.

When the merger between Fox and National Geographic was first announced, Washington Post media reporter Paul Farhi wrote a curious article about how the financial difficulties cited as a reason for the sale were not evident in the National Geographic Society’s publicly-available financial documents. “In fact, in 2013, the most recent year for which records are available, the organization had one of its best years. Its revenue grew 16 percent, topping $500 million and throwing off a $25.7 million surplus. Net assets expanded by 20 percent, putting the society’s net worth close to $900 million,” wrote Farhi. Executives at the organization, including the magazine’s then-editor in chief had all been well compensated for their part in buoying the Society through tumultuous recent years. Farhi reports that executive compensation there ranked among the highest in the country, though cautions that comparison to other non-profits might not be good because the organization is part-charity, part-commercial.

Nevertheless, Farhi’s Nov. 4, 2015, article on National Geographic’s layoffs says that the layoffs were done to avoid “financial derailment.” In 2014, Farhi wrote, “Its revenue declined about 5 percent, to $500 million, and its operations swung from a surplus of $25.5 million to a $20 million loss. Net assets declined by $90 million, to $805.5 million, compared with a year earlier.” In his earlier piece, Farhi wrote that much of National Geographic’s financial growth could be attributed to its investment portfolio, and thus the organization was vulnerable to swings in the stock markets. The sale to Fox was intended to stabilize the organizations financials.

National Geographic Society President and CEO Gary Knell told Farhi, “You can’t prejudge [the merger]. If in two or three years, if we mess up the [National Geographic] brand, then people will judge us. But give us a chance.”

National Geographic magazine partners with Fox to become for-profit

National Geographic and 21st Century Fox have announced a new for-profit partnership taking over the magazine and other NatGeo media properties.
National Geographic and 21st Century Fox have announced a new for-profit partnership taking over the magazine and other NatGeo media properties.

I had to double-check the date on this to make sure it wasn’t an April Fool’s joke. The Washington Post is reporting today that National Geographic magazine, which has been a non-profit since 1888, will become for-profit in a new partnership with 21st Century Fox, Rupert Murdoch‘s media company. In addition to the magazine, the partnership includes National Geographic’s television channel and other media properties. The National Geographic Society, which has owned the magazine since the beginning, will remain non-profit and separate from this partnership.

National Geographic is no stranger to corporate partnerships, but this deal seems altogether different from private companies’ underwriting the organization’s grants and operations. In exchange for $725 million, Fox will own 73 percent of the new media company, called National Geographic Partners. The National Geographic Society will own the remaining 27 percent. The chair of the partnership’s board will rotate annually between a Fox representative and a National Geographic Society representative.

National Geographic’s press room has a bit more detail in a press release.

There’s little information about how this will change the magazine or National Geographic’s other media assets. The cable channel has been the subject of controversy in the past; close to my hometown, the channel’s reality show “American Colony: Meet the Hutterites” has been called distorted and exploitative by its subjects. Another National Geographic show featuring Montana, Diggers, has been criticized for promoting the looting of archaeological sites. And in the past, some of National Geographic’s photo contests have been rights grabs. Their ongoing Your Shot photography community allows National Geographic and its partners perpetual usage of submitted work.

WNYC’s On the Media had a good piece a few years back looking at what it called of National Geographic. The show questioned National Geographic Society CEO John Fahey and National Geographic Channel CEO David Lyle about the preponderance of trashy, “pulp” reality shows on the channel.

My hopes aren’t high for what this transition means. The American cable channel TLC was originally run by NASA and featured programming that fit well under its longer name, The Learning Channel. In 1980, the channel was acquired by a private company and began a long slide into what it has become now, a television channel featuring the worst of the worst “reality tv.” It will be interesting to see what becomes of National Geographic’s magazine and other media as this partnership takes hold.

FAA says journalists can’t use drones but can buy drone-created photos/video from hobbyists

In what strikes me as a very strange distinction, the FAA has said this week that journalists and media organizations may not use drones for their newsgathering operations without permission, though they may purchase photos and video from hobbyists that they do not employ.

American journalists and media organizations have been pushing the FAA to rule whether or not they can legally use drones for newsgathering for some time now. In March of last year, a judge ruled that commercial drone use is legal in the US, though the FAA appealed the ruling.

A person who wishes to operate a UAS to take pictures or videos or gather other information that would be sold to media outlets would need an FAA authorization for the operation”FAA, Media Use of UAS, May 5, 2015

Now, in a memorandum issued May 5, 2015 (embedded above), the FAA says using a drone specifically for newsgathering, whether it’s a news organization or a freelancer intending to sell the work to a publication, requires FAA permission as does any other “non-hobby” usage of unmanned aircraft systems (UAS or drones). However, if a hobbyist happens to take pictures or video and a media organization wants to license that work for news purposes, the FAA says that is okay because the flight is considered authorized.

Hopefully, there will be legal challenges to this memorandum. Both a Forbes contributor and Vice Motherboard have more coverage of this memorandum, raising concerns about the restrictions this places on the press. The memo makes me think of last year’s controversy over proposed US National Forest regulations regarding photography on public lands.

On this subject, do yourself a favor and check out Tomas van Houtryve‘s Blue Sky Days project, if for some strange reason you haven’t seen it yet. It’s been widely published and awarded, and for good reason. The project is the most creative and insightful investigation of American drone warfare that I’ve seen. I saw him present the work to a small crowd a couple weeks ago at the Magenta Foundation‘s Flash Forward Festival in Boston. If he’s presenting in your area, his presentations are well worth checking out.