UPDATED: Valence Media co-CEOs Asif Satchu and Modi Wiczyk have issued an internal memo about today’s cuts at Hollywood Reporter, Billboard, Dick Clark Productions, Media Rights Capital and Vibe magazine which they claim were “difficult” and “necessary measure to remain strong for our employees and partners” given the current COVID-19 crisis.
Both Satchu and Wiczyk are not taking salaries or participating in a salary recoupment program. In addition to cuts, there were hiring freezes and salary reductions for those making more than $100K annually “with the highest paid shouldering the biggest percentages.” Those who are having their salaries impacted can recoup those contributions down the road “based on the future success of the company.”
Their note reads, “Each of our divisions was affected differently, dependent on the specifics of the business. The greatest impact was on our Media division, which underwent layoffs and a restructuring, part of which was a response to advertising market conditions and part of which was an acceleration of actions that were planned for 2020-2021. For all those who transitioned out of the company, we provided severance packages which included six months of extended health care, among other benefits.”
Sources tells Deadline that Valence walked into a situation where Billboard and THR were together bleeding $10M-$15M annually. At MRC, Satchu and Wiczyk have been about producing cash cow features at low costs and profitable margins (i.e. Baby Driver, Knives Out). Today’s cuts were poised to occur ultimately in a healthy marketplace, and the COVID-19 economic crisis merely fast-tracked layoffs. Valence bosses and THR have been in severe disagreement, reportedly over editorial content, but one insider says that Valence “wants to support creativity and good journalism.” We hear the bottom isn’t falling out at Valence Media; they’re just looking to have the Media division be in the black.
Their memo to staff is in full is below:
From: Modi & Asif
Date: Tuesday, April 14, 2020 at 5:45 PM
We have written to you these past weeks with perspectives on the impact of the unprecedented health and economic crises caused by COVID-19. As we have seen, even the biggest companies in the world are being forced to make very difficult decisions. Those companies that avoid making hard choices now risk having to make even worse choices later. Our company is no different. We are strong, but we are not immune to the crisis.
Today we enacted difficult, but necessary measures to remain strong for our employees and partners.
Each of our divisions was affected differently, dependent on the specifics of the business. The greatest impact was on our Media division, which underwent layoffs and a restructuring, part of which was a response to advertising market conditions and part of which was an acceleration of actions that were planned for 2020-2021. For all those who transitioned out of the company, we provided severance packages which included six months of extended health care, among other benefits.
We have taken additional measures that share the burden across the company. These include hiring freezes and salary reductions. The salary reductions affect only those making more than one hundred thousand dollars per year and increase progressively, with the highest paid shouldering the biggest percentages. For those colleagues whose salaries are impacted, we have created a program that enables them to recoup their contributions based on the future success of the company. The two of us will not take any salary, nor will we participate in the recoupment program.
These initiatives do not affect company contributions to your 401k or overtime for non-exempt employees.
Many of you may ask: what assumptions were made in determining these actions, and are more actions planned for the future? Though these are uncertain times, we made these decisions assuming that our society will emerge from lockdown over the course of the summer and early fall, and that there will be a fairly serious global recession for at least one year. We do not anticipate any more COVID-19 related actions unless conditions fall below that threshold.
We want to thank all of you who have exhibited empathy and care for those affected, and also those who have made sacrifices that protect and strengthen the company in the short run. We will be setting all-hands video conferences with each division to answer questions and share our view of the path forward for our company during the coming weeks and months. We are confident that with these measures in place, we have the team, assets, and resources to thrive.
With our deepest appreciation,
PREVIOUS: Less than a week after Hollywood Reporter editorial director Matthew Belloni exited the publication, owners Valence Media started making staffing cuts at outlets THR, Billboard, Vibe, Dick Clark Productions and finance studio Media Rights Capital today.
At this point in time, we’re hearing that senior ranking reporters and editors remain safe at THR, and those impacted were in Ops. However, sources say that layoffs “are definitely expected” at the trade in the immediate future and coming weeks.
Long beset by rocky finances, THR has taken significant advertiser and other revenue hits during the coronavirus pandemic. Valence Media is looking to fix what one source bills as “a bloated cost structure” at the trades. Even as early as January, THR was reevaluating its people on the ground at major festivals such as Sundance were they sent a limited crew this year, and didn’t host an ad-supported photo/video studio like other entertainment publications, i.e. Variety and IMDB. Deadline has heard from one insider that these cuts were bound to come, and that the COVID-19 climate just accelerated everything. Our source was gobsmacked by the losses that Billboard and THR posted in a given year over the last decade, but it is not the $9M-$10M annually that’s being reported out there, more like $10M-$15M combined. Overall, since Valence has owned the trades, they haven’t been cool with those types of losses.
Among those impacted at other Valence outlets included Vibe Deputy Editor William Ketchum III, Billboard writers Will Gottsegen, Chris Payne, and Annie Reuter who took to Twitter to express news about being fired.
At least eight people from Dick Clark Productions were axed, and three staffers from Valence finance studio MRC.