Village Voice owner splits print, adult dotcom biz
- Last Updated: 11:49 PM, September 23, 2012
- Posted: 11:18 PM, September 23, 2012
Village Voice Media Holdings, under intense fire from advertisers, investors and activists over its adult classified website Backpage.com, is splitting in two, separating its weekly print publications from the controversial online business.
The papers, including the famed alternative weekly, will be spun off as a new company, Voice Media Group, based in Denver and headed by the company’s current chief financial officer, Scott Tobias, who will become chief executive.
Christine Brennan, another longtime insider and executive managing editor, will become executive editor, while Jeff Mars, vice president of finance, will be chief revenue officer.
Backpage will continue to be owned by Village Voice Media CEO Jim Larkin and executive editor Michael Lacey.
The current owners “are ready to move on and hand the reins to a new generation of writers, editors and publishers,” according to a company statement.
Backpage will “become the centerpiece of a new online classified advertising company with business worldwide,” company lawyer Liz McDougall added, declining to provide additional details.
Backpage generated an estimated $28.6 million in ad revenue from “escort” and “body rub” ads in the fiscal year ended July, according to research firm AIM Group, making it the country’s largest adult classified network — and a big target of criticism.
It remains to be seen if advertisers and investors will be mollified by the ownership change and corporate split. As with the controversy that engulfed Craigslist, activists claimed Backpage facilitated sex crimes, including the exploitation of children and human trafficking.
“There’s no question that Backpage has been a distraction,” Tobias said in an interview with The Post.
He insisted the new company is “absolutely” profitable without the lucrative Backpage and that he has no connection to or investment in the site.
He declined, however, to say who his partners were in the transaction or whether Larkin and Lacey, who owned more than 50 percent of the privately held company, would retain a stake in the publishing spin-off.
“We secured private financing,” Tobias said. “We’re not going to get into the financials.”
Despite growing criticism, Lacey and Larkin defended the adult ads, claiming they were within their First Amendment rights to run them and that they worked with law enforcement officials to crack down on child exploitation.
That position has failed to appease state attorneys general across the country, including New York AG Eric Schneiderman.
The National Association of Attorneys General had issued a letter signed by the top prosecutors of 48 states asking Village Voice Media to drop Backpage.com. In Washington State, a bipartisan bill has passed that makes it illegal to knowingly publish advertisements for adult services that result in the exploitation of minors.
Investors also distanced themselves from the backlash. In April, Goldman Sachs sold its 16 percent stake in the company back to Lacey and Larkin, saying it had become “uncomfortable with the direction of the company.”
Larkin and Lacey have proven to be controversial owners as they expanded from their home base in Phoenix, Ariz., to create the largest alternative weekly chain in the country.