The Messenger’s Desperate Bid to Merge With LA Times Collapsed When Time Ran Out
In the final hours of The Messenger, owner Jimmy Finkelstein reached out to offer a merger with the Los Angeles Times, telling his staff that a deal was imminent, TheWrap has learned. But the Los Angeles Times insisted that there was no such deal on the table, only a desperate call from Finkelstein to owner Patrick Soon-Shiong, according to an insider there.
Two individuals with ties to The Messenger told to TheWrap that Finkelstein and Soon-Shiong were eager to merge their organizations, but could not get the deal done fast enough to outrun a lack of cash.
“Patrick was very keen to do the merger – which is why the announcement to staff about The Messenger closing was delayed. Patrick had the money, and at that point, Jimmy would have taken anything,” said the first individual with knowledge of the negotiations.
“Jimmy was really holding out for the deal with Patrick, and even on Tuesday night Jimmy was saying to staff he was inches away from making the deal.
“But it fell apart on Wednesday because they didn’t have enough time to do due diligence. That can take months and The Messenger didn’t have enough cash to stay afloat for that long.”
But an L.A. Times insider disputed this version, saying that Finkelstein reached out to Soon-Shiong on Monday but there wasn’t any discussion of a merger, and neither the Times or any entity affiliated with the Times made any offer for The Messenger.
The Messenger shuttered on Wednesday less than a year after its launch.
Finkelstein, media entrepreneur and founder of The Messenger, had told the company’s board this week that he was discussing a deal to merge with the L.A. Times to prevent the website from going under. The L.A. Times has also experienced financial troubles as of late, with 120 jobs cut from the newspaper in January.
The New York Times first reported the proposed deal on Thursday.
A merger could have driven some further digital readership to the L.A. Times, which could afford to bolster its subscriber base. In return, the billionaire owner of the L.A. Times Patrick Soon-Shiong could cover The Messenger’s payroll, keeping the company alive.
Soon-Shiong was not the only person approached by The Messenger’s leadership to save the start-up. Finkelstein also approached Omeed Malik, a financier who has been financially involved in Tucker Carlson’s new media company.
Ultimately, negotiations fell apart, according to Finkelstein’s communications with the board, and The Messenger had no alternative to shuttering. In his memo to staff announcing the decision to close, Finkelstein wrote, “Over the past few weeks, literally until earlier today, we exhausted every option available and have endeavored to raise sufficient capital to reach profitability.”
The closure of The Messenger on Wednesday was abrupt and messy. Staffers were locked out of Slack and the website was closed down almost immediately, with no access to employees’ archives.
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