Vox Media's Jim Bankoff Explains Why He's Selling to James Murdoch

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I'm Pete Barara, and this week, George Packer of the Atlantic joins me to discuss Trump's lasting effect on the American mind. The episode is out now. Search and follow Stay Tuned with Preet, wherever you get your podcasts. From the Vox Media Podcast Network, literally at the Vox Media Podcast Network with the CEO of the company that owns the Vox Media Podcast Network. This is channels with Peter Kafka. That's me. I'm talking to Jim Bankoff, the CEO of Vox Media. Hi, Jim. Hi, Peter. You're in the news today. Thanks for coming by. Yeah. Well, you like, thanks you for coming by. It's so great to be in our studios and doing an interview here. I think this might be the first or maybe the only other one I did was with you, or perhaps. I don't even remember. Anyway. Anyway, I'll tell a couple of these with you. Before we start, I have a ton of disclosures here. I work for you for eight years at Vox Media for the last two years. I've been recording my podcast with the Vox Media Podcast Network, again, which we just talked about. On top of all of that, I like you personally. I think you are a good human being as well as a good boss. So let's just get all of that out of here. I like that last disclosure. And I will second that emotion. You're my only media stop today, Peter. And maybe my only one period is this really my only podcast for now. So it's great to be here. Now the love fest is over. I saw the press release you put out about the deal just to set it up. I can't imagine anyone's listening to this. Who doesn't know what it is. You are selling the Vox Media Podcast Network, New York Magazine, and Vox.com to James and Murdoch's holding company, Lupus Systems Correct. So why is this a good deal for Vox, it's shareholders, and then the other company that you're not selling, which is a collection of websites, including the eater, the verge, pop sugar, et cetera. Yeah, absolutely. So you're right. We're excited to be essentially splitting the company into two until close, which usually takes about six weeks. I'll be the CEO after the combined company as I am today. After that, I'll be CEO of the Lupus Systems Company. And Ryan Polly will be the senior leader of the new company, the other part of the company, which will be named. And it's exciting and it's great. And I think I was just happy to read the New York Times article. I think I was quoted as saying as someone who has been here since the beginning who takes accountability for the architecture and the journey. I'm so excited for both parts of the company because I think it allows them to reach their full potential, allows the employees to, allows the brands to, it allows us to do great things for our business partners, our advertisers, et cetera. One side of the company is focused on what I'll generally call in media jargons since this is a media podcast talent-based platforms and multimedia, multi-visual, also with more of a subscription bias. So the Vox Media Podcast Network, a talent platform. The New York Magazine itself a different kind of talent platform, talented journalist, but also increasingly expressing itself multimedia. But importantly, with the subscription business, it really propels it forward. And then Vox is a multimedia from the outset as well as, and by the way, you used to work at Vox after recode. So those businesses naturally go together. They have growth characteristics that make sense to go together. They also have multimedia characteristics and make sense to go together. Other businesses also have multimedia and also have growth, but they're more similar. There is a time, there is a time five plus years ago where bringing everything together, getting a whole lot of scale made sense. And as it tends to do, media change a lot. The internet change a lot. Technology change a lot. That's what happens in our industry. And so what made sense for us to come together five plus years ago now makes sense for us to get focused. So that all makes sense, I guess if you don't look under the hood, but I didn't report on this because it would be weird for me to report on a company I'm working at. But I ended up talking a lot of people about it anyway. And it seems like what was happening under the hood was you guys took the podcast network out and I guess you're saying you were approached by buyers. You definitely brought it out, offered to other folks. There were a bunch of people who were interested in the podcast network. Again, the thing I'm recording this on. Then you at some point added New York magazine and Vox.com to that. But most of the other buyers only wanted the podcast network. And it doesn't seem like anybody was dying to buy the other site. So what is that? Was that right? No, well, not exactly. The sum of it is right. But it's true. We were approached from the outside about originally the podcast network. And by the way, with regards to Vox, we'd always contemplated that Vox was part of that because Vox, so much of what Vox does is, by the way, for those listening, there's Vox media and then there's Vox. But so much of what Vox does is podcasts and video. Today, explained is a very, very, very popular podcast. And it's not just today explaining the primary driver. That's a top 10 podcast. It's a top 10 podcast. But there are some other big ones in there. And there was also a massive YouTube channel that, you know, and so, you know, I think the majority of its revenue comes from things other than what I'll call text-based. Although it has a great text-based program, too, of course. So, so that has always been contemplated as part of it. Yes, we got some outside interest. We didn't take it too seriously at first. But then we thought to ourselves, well, this is a different kind of business, a growth business. And maybe it should have in business speak its own capital structure, its own ownership structure. Maybe we should think about that. And maybe it makes sense. And we did. And then the fact that New York Magazine came along was a little bit more based on initially their idea. James Murdoch's idea. Yes. And we walked through the logic of it and it made particular sense for the kind of company they're creating. And I think it makes a lot of sense as we think about it together. And so, you know, we got our heads around it in the process, move kind of quickly at that point. And here we are today. I will say that, you know, the part that wasn't exactly accurate is, I think there's interest in like literally every single part of the business. But we're not looking to, you know, just to break things up for this sake of breaking things up. And we're looking to be successful and create the right culture and the right environment for success. And so we don't expect to break things up beyond what we did today. I guess what I was trying to get to is it seems like the thing at least media buyers were most interested in was the podcast network. And I'm wondering why you think that appeals to them more than other properties. Well, I questioned the premise. He kind of, certain types of investors were. But having said that, I'll go along with the question. I talked to one of them, the CEO of Versa, and well, at this table last week, he said, you know, I didn't, I, the thing I wanted was the podcast network, not the other stuff. But then you're generalizing his network. No, but it doesn't matter because I grant you that it's an exciting property. And, you know, there's some obvious reasons for those that your listeners understand the stuff. Well, first of all, it's an extraordinarily high growth property, which makes it attractive upwards of 40% per year for quite some time. And what's driving that audio of video? All the above, all the above. It taps into another thing that's driving it's taps into what we call the creator economy. Vux media podcast network approaches it in a certain way, though, which I think is about as kind of premium as thoughtful as you can get. So there's a lot of great approaches, some focus on it, giving category, sports comedy, et cetera. What we tend to focus on are sort of the best at what they do, whether it's Bernet Brown and Adam Gran or Cara and Scott or today explain. We go out, I should say criminal, I should say cafe with pre-it. I can go on and I don't want to leave anyone else, but I have to because there are dozens of them. But what they all tend to have in common is they are thoughtful and they are smart. They could be funny. They could be analytical. They all have their own approach. But it's a highly curated network that still has scale. Number six on Poddrak, which is the ranking system for these things. So we're not after scale for scale, sake, but we are after quality scale. And that's what we've achieved. And I think that's part of what made it so interesting to people. And it's also a network where in my case, and I think for many of you, many of you tell that they're not your employees, they're, they're, you sort of have a vendor of ND relationship. And is that part of the field as well? It's about split, you know, I don't even know the exact split, but, but, you know, as As you pointed out today, explain Top 10 is a. is produced internally. And then, yes, we have great partners as well. - But I mean, is the idea that sort of this is a talent business, you guys have relationships with talent but don't have to pay the overhead of keeping them employed full time. You don't have to pay deal with their health insurance, et cetera. - Yeah, I don't really view it that way because we may not pay their health insurance, but we in some cases pay them millions of dollars because they, - You're like, it's not free. I'm just saying it's a different profile to that point. - Yeah, it's a different economic. - And here's how I like to think about it, is like we're open to different economic relationships. I mean, since we're fully disclosing, we have one with you. - Yeah. - And depending on what makes sense for the creator and what makes sense for our business, we come to an understanding on that. And different people have different needs, et cetera. So we try to accommodate that where it makes sense for our business to do so. - You talked about being here from the beginning and sort of putting this architecture together. So let's go back. When you bought the company I was working at in 2015, the Careers, which were in Walpurg, Walpmasbergs, all things, no, it's called recode back then. You bought it then. And at the time you were building this house of brands and the idea was we're gonna have lots and lots of different verticals. They're all knitted together. And really sort of the main idea was, we can take this, we'll have more scale and we'll use that scale to work with at the time. Partners, primarily Facebook, but all the platforms. When I started, I think you guys were all excited about making a original video for Snapchat. And I was really depressed. I'm like, I can't make video for some of what I'm gonna do. Obviously things have changed. I'm wondering as you look back and see sort of how you built the company, are there things you go, oh, I really wish we wouldn't have done that. Or do you say, no, I understood why we did that. It made sense at the time and that was just the evolution. - Yeah, I think both. With all humility, we've gone in wrong directions on many occasions. Thankfully, we've gone in right directions and more occasions and that's why we've been successful. And I'm proud of what we've done. I'm very proud for me. It's been close to two decades. And I started off as CEO of SB Nation, which I'm still extraordinarily proud of SB Nation in the changing environment. It's killing it right now. But media changes and media evolves. I'm proud to say that in the past 20 years, where I really, I would say maybe the only media company that I can think of at least that has, from the ground up, built category leading brands, SB Nation, I just mentioned, the Verge, Vox. And then of course, the Vox Media podcast network, all from Whole Cloud, all from scratch. Most people are lucky to do it once. We did it at least four times. We wound up having to sell polygon, but I'd put that on the list as well too. So we built things that are enduring in leaders. And then we also acquired things. And when we acquired things, I think we did very well with most of them. For instance, Eater, which already had started out and other people started it. But we were able to take it and grow it and expand it to what it is today. It was an elite, but kind of small site. And it's still lit, and that was big. And it's really the leader in its category. But whether it's Eater, whether it is, most notably, I suppose, on the acquisition front, New York Magazine. And New York Magazine is older than me. And I was saying something. And it's been around for, I guess, 58 years. And it had its own culture. But David Haskell and Pam Walls are seeing really are the life force business and editorial of making that place so successful. But I think we created the right conditions for it to continue to grow, to build an amazing subscriber business that is upwards of 400,000 subscribers growing at over 20% a year on the subscription front. And most importantly, its quality is not only-- its quality is getting better and better. Today, what I am here to celebrate is not this transaction. What I am here to celebrate is winning two major asmese. That's our magazine awards, including General Excellence, which-- Those are the Oscars of the-- The Oscars of the magazine. And the New York Magazine team led by David Haskell, won the best picture equivalent, which is the General Excellence Award. And I bring that up because that's for me what it's about. That and running a good business. And I'm so proud that we have been stewards of that asset and the rest to get us to the place where we are. So yes, there are probably things that I can talk about that weren't successes, too. But we had enough successes. And I'm really proud that we're-- Really, I think there's a lot of great stuff that we were able to accomplish. Stipulate did great stuff. You hired me. You kept me employed at the top of the list. Is there one major do-over? I guess I'm really thinking about his Facebook the thing you regret the most. Yeah, listen all of them. Let's be honest about all the platforms. I'm careful to say that in some senses, we couldn't have existed without these platforms. If I go back-- You guys started this company with YouTube. Yeah, I'm a student of media. And until the internet, you had to have a radio tower or printing press and a license for the radio tower and a local monopoly for the printing press. And so I had no way of breaking into that. And then along comes the internet. And we can do that. And then along comes Google and Facebook. And you can be seen with those things and distributed those things. Now the problem is the rug got pulled out from under us. And I think in some cases, in not entirely ethical ways, those companies don't have any responsibility in some senses to us. But the problems start coming in where they take the content, particularly in this AI age. They effectively steal the content. And then they use it to make their own services and to charge their own customers and advertisers for. So that's a problem. But having said that, we don't sit around making excuses. We make great products. And we have at Vox Media because we have strong brands. We're able to build direct consumer connections. And so, yes, like algorithms change. They come and go, you can't ignore them. But you also can't become reliant on them. Again, when I came here, the real focus was Facebook with video video, video making video for the platforms, but also selling. We're going to make television shows and movies everyone is trying to do it. And did the selling to networks and movie theaters, that business did not really pan out. Again, it didn't really pan out for most people. Yeah, I mean, I just, we had some great-- I want to rewind it up because it occurs to me that the, hey, let's make video. People will consume video. People will pay to have their ads and video was right directionally. And it seems like you now have ended up in the right place because your podcast network is essentially a video network. And I'm wondering if there's a lesson there for people who are thinking about building businesses now. No, that's a good question. We all, in our industry, we all joke about the pivot to video. cliche. And-- But the reason-- I mean, everyone says pivot video was this terrible mistake. Because again, you feel like the rug was pulled out for me. But like, the idea of making things that people want to watch is not a bad idea. Yeah, no, it's not over complicate things, like people like watching stuff. They like reading stuff. They also like listening to stuff. But they mostly-- if you did a pie chart, most of them like watching stuff. We were early. Everyone, the industry was early. But let's also be honest, we carry around 4K screens in our pockets. And we can use those 4K screens. And it took a little while for that all to be figured out. And without the fits and starts, we want to be where we are today. So if you're not failing, you're not trying hard enough. I know that's easy to say as a CEO. And because what happens is you invest in something and it doesn't work out. And then that often has an impact on people's careers. We don't take that lightly. But the same time, risk is a two-sided coin. And if the chances you don't take are the shots on goal that you don't take, you won't score. And so you're going to miss a lot of shots. But if you don't take the right shots, you're not going to score. And I'm not trying to be all sports cliches. But it's just the truth. And the medium is progressing. And thankfully, we have been an innovator there. And some of the innovations went down rabbit holes. Others, enough were successful that we're here today. Last history question. And also a chance for you to celebrate yourself and your management here. For a long time, when people talked about the new upstarts in digital media, they were focused on Buzzfeed and Vice. And those were competitive companies. Those companies had higher valuations. They had more buzz. And they had a much harder landing last week. We just had Buzzfeed being sold for a theoretical 120 million. And maybe less than that. And today, Vox Media is not where you wanted it to be 10 years ago. But it seems like it's a much better place. How do you account for that? I-- a lot of different things. I want to thank-- our employees and our culture that we've built. And I thank them in a long letter today. But we have people who come to work every day and just focus on quality work. I brought up the Asmi Awards as an example. But there are so many examples of our outstanding work. But in addition to the team and our business partners who are wonderful to work with, I want to point out our investors, too, because often in this industry, investors sort of get a bad rap because they-- They're the money, guys. Yeah, exactly. But I'm going to name a few by name. I'm just going to start with the first investor. I'm Andrew Brachia of Excel Partners, who has been with us for about 18 years. Those of you who know this industry know that an average fun life is probably like seven years or something like that. He's never been impatient. He's always been supportive. And I will list all of them at our most recent investor, Jay Penske, same way. Jay knows this business inside and out has always been supportive of us. And of course, you mentioned. in Versa, whether it is now run by Mark, who I've known for decades, always been supportive, but it wasn't just Mark, it was Steve Burke, who used to run NBC Universal. It was the folks at Comcast who've been wonderful. Coastal Ventures, the Wassertine family who have been guiding New York Magazine and ultimately merged it with us. And I can go on, there have been other great ones too, but they are patients and they're understanding our business and all that time, 'cause hopefully you have some journalists listening to, never wants in the 18 years of this company as any investor ever leaned on me, ever winked at me, ever suggested that we change anything in any of our stories, any of our journalism, what so ever. How incredible is that? The patients with the capital, the patients with our editorial freedom. And these are people who know people who have friends who we might not write good things about, never. I mean, isn't that incredible? And I think with James Murdock and then with the existing investor staying on with the rest of what is now Vox Media, that's not gonna change at all, that commitment to editorial integrity. So that's what makes it work. And that plus great people and a culture that we can build. - So I wanna ask you about Murdock and what's gonna happen, but also why I'm shocked that you are going to work for James Murdock. I would have thought you said, you spent 18 years on this project. You and I have talked about this, it's a lot of work. You've had to go through a lot of ugly stuff, you've had to lay off a lot of people to difficult work. I'm not saying that you lay people off as well. - Yeah, I'm gonna lay off, but you can try to look for people. I would have thought you would have said, I would like to do anything other than this same job I've been doing for 18 years. So why are you going to work for them? - There are probably a lot of media people listening to this. I want to do your podcast in particular, 'cause there are a lot of media people who listen to this. And those of us who are in this business, we know that it is a lot of work. It's a lot of work, 'cause it's always changing. There's a lot of work. I always, and people debate me, but I think media is the fastest and most dynamically changing business of everything. 'Cause not only is it subject to the technological changes, one day it's podcasts, the next day it's short form video, et cetera, but it's also built on societal change. It's different topics that we care about and getting experts on those topics, different formats. - I think business, I love being in it, but why keep doing this thing? You've been doing why not either start something new or go work at some place that's established and it just have an easier life. - I'm not looking for an easy life. I'm looking for a-- - Easier. - I'm looking for a fulfilling life. And because there's so much change, my job changes, even if I stay in the same role in some ways. Like it's always about reinvention, it's always something new. And so in the platform. Now this will be a new journey again six weeks until we get started on it roughly, but it's gonna be a new journey. We're so excited for the part of the business that I'll be running at that point. We have big ambitions for it. We are going to be the preeminent home for talent and we need to keep building. We have a great head start, but we need to build on that head start. We need to continue, I mentioned 400,000 York magazines, subscribers, we're gonna get that number to a million as soon as possible. But we want to do it the right way. We're not gonna take shortcuts. We're gonna grow it the right way. And of course, Vox has so much potential as a multimedia platform. And so, do you think the business changes in a meaningful way or is the idea that James Murdock likes what you bought? Like what you're doing, he's bought you and says, keep doing that or is the idea. Now that I've bought you, I'm gonna hypercharge this with more capital or focus on this. - We'll be looking for ways to take what we have, yes, and then accelerate it. And I think it's not just about capital because we're gonna continue to be a disciplined operating company. We're not gonna throw money at things like venture style. We are profitable company. We're gonna grow our profitability. But we have a steward who gets this business extraordinarily well. Sometimes you have to make choices between capital and knowledge in an industry or values in an industry. In the Murdoch's in Lupa, we have partners who have it all. They have deep expertise. You know this business as well as I do. And you know when you're sitting across someone who has lived it and experienced it and is on the level with you, that's them. Secondly, they have the capital. And then thirdly, they have the values that matter. If you look at not only how they've conducted themselves, but what they've invested in on the nonprofits fear as well, Capheron's incredible work, helping journalists and journalism nonprofits and local journalism, they get it. And so we're gonna continue to be disciplined, but we're gonna be very, very ambitious. - What changes for the folks who are working for the properties that aren't getting acquired? Theme on this show for years and years and years is how difficult it is to make a living in media, specifically digital media, specifically selling ads on web pages. They have things that are not, you know, they're verged as the verged cast. There's things that are not digital web pages that they sell, but that's still a primary business. How do you think they're gonna fare? - You know, I think they're gonna very, very well. I think there's a lot of excitement over there. Start at the top with Ryan, who, you know, there's been a lot of great things about putting this together. Maybe at the top, you know, for me, is I seeing Ryan's success. And you know, I'm gonna miss being a day-to-day partner with him, although we'll be working together on a whole lot of things. And so-- - That's Ryan Polly, you can choose. - Ryan Polly, you're in the office here. He's gonna run the news. - Thank you. And, you know, so it's exciting to see that. But each one of those brands that will report into Ryan are in really good shape and getting stronger. There was a, you know, they each, like most media brands have to go through the changes, particularly brought upon by the changes of Google search. But they have gone through that now. - So there's a self-sufficient media company, though. - Absolutely, absolutely. And, you know, having said that, they'll have plenty of options for where to take it from there. And, you know, but it's sticking together. And, you know, they're gonna, each one of those brands well, getting some benefit from being together, have their own business strategies, have their own audiences. They can go to market together from a sales proposition and get plenty of scale. But they're all in a position to really thrive. Eater, the verge, espionation, pop sugar, the dodo, all really strong brands in their own right. - Last question for you, do you have a commitment that you're gonna stay X number of years at Lupa? - I'm a product. - You know, like all of us, like, you know, we're gonna, people of free will, and my free will is I'm gonna stay at Lupa as long as I possibly can, because I'm excited to build this. But it's not, I think, you know, not to be coy about your question. Like, I'm doing this 'cause I wanna do it, not 'cause I have to do it. - It's not a requirement to do the deal. - No, I'm doing this 'cause I wanna do it. And I wanna lead this company forward, and I wanna partner with James and his team to do that. And, you know, they also have other companies, are Basel, Tribeca. They have big huge investments in India and other things. And so, there's not gonna be any forced synergy across those things, but you can see what they're doing to kind of build things, particularly focus on things that in the world of AI and a lot of, like, synthetic experiences, like, they're very much investing in real human experiences. And I like that thesis, and I wanna be part of that. I wanna be a leader there. I've devoted my career to this. I love this. I sincerely love it. And I, you know, today's an exciting day to kind of recommit to that mission. And I'm certainly committed. - Jim Beckoff for the next, what, six weeks CEO of Box Media? - And then we're still gonna call Box Media after that. - Okay. - I'm gonna keep calling us the Box Media podcast network. - That's what it's called. That's what it will be called. - Okay, so I'm gonna keep working with you. - Absolutely. - All right, deal, good deal. - All right, thanks Jim. - All right, thanks Peter. (upbeat music)