Out magazine is pushing for a fresh start with a new staff and a new look, but ongoing issues around lack of payment to many past contributors is starting to get messy.
Let’s start with the positive. Since Teen Vogue alum Phillip Picardi came on in November as Out’s new editor in chief, traffic to the site has increased steadily, going from 691,000 unique views in September to about 1.5 million in December, according to ComScore data. Ad pages in print also held firm between the issues of February 2018 and February 2019 (the first under Picardi), while revenue from digital ads has already grown 48 percent year-over-year. Revenue from the digital business during 2018 for all of the brands now operating under Pride Media — formed after Oreva Capital at the end of 2017 acquired Out, The Advocate and other related brands — came in at just under $5.8 million. That number is projected to increase 26 percent to $7.2 million this year.
Nathan Coyle, who in June became chief executive officer of Pride Media, said he has nothing but respect for “the history of this brand,” adding that recent growth at Out is “out of control.” Traffic across Pride Media has doubled year-over year and the company just closed its largest ever deal, a yet-to-be-revealed partnership with a large content media brand.
But there’s a cloud hanging over all of this: scores of former contributors — stylists, writers, makeup artists, photographers, et al. — are still waiting to be paid for work they did at Out last year, and some even before that.
It’s a fraught topic for those who would typically be thought responsible. Coyle is openly frustrated with the situation, one he claimed is even more expansive than he knew last fall, when WWD first reported on various issues at the magazine, and he says has so far grown into a cost “well into the six figures.” But he maintains that all amounts outstanding to former contributors are in no way the responsibility of Pride Media, despite Oreva’s acquisition. Instead he’s pointing straight back to a recently dissolved production arrangement between McCarthy LLC, owned by BlackBook’s Evanly Schindler, and Grand Editorial, a now-defunct company started by former longtime Out editor in chief Aaron Hicklin, whom Picardi succeeded.
“The magnitude of fraud that was committed by McCarthy is much greater than I understood a few months ago,” Coyle alleged.
According to Coyle, (who admitted he’s had no access to McCarthy’s invoices or accounts, but claims to have made such requests and claims to have copies of checks or money transfers that were paid to McCarthy to service Out) the allegation of fraud is feasible because of the odd system Out had been operating under for years, wherein Hicklin’s Grand Editorial created and ran Out magazine for a flat fee paid by its previous parent company, Here Publishing, owned by Paul Colichman — essentially an outsourcing arrangement. Before Oreva Capital acquired Here and renamed it Pride Media, Hicklin made a deal with Schindler/McCarthy for Grand Editorial, complete with its agreement to operate Out. Grand Editorial was subsequently dissolved, according to Hicklin, and the production arrangement became one between McCarthy and Pride.
But Schindler, who is ceo and editorial director of BlackBook, is also clearly frustrated and said any implication that he or McCarthy is responsible for nonpayment is “ridiculous.” He in turn claimed it was in fact Pride that started making incomplete payment to McCarthy early last year, eventually stopping altogether, making it impossible for Out contributors to be paid. Schindler also claimed that he’s owed more than $270,000 by Pride to this day and characterized McCarthy as little more than another unpaid vendor of Pride.
“This is just a tactic,” Schindler said of Coyle and Pride’s implication. “It’s a tactic to not accept responsibility, a diversionary tactic to not pay people and place blame elsewhere. Everybody knows it’s false and ridiculous.”
BlackBook, which McCarthy is the holding company for, in October sent an e-mail to some contributors placing responsibility for payment on Pride, stating: “Outstanding payment will now be paid by Pride Media.”
Bernard Rook, executive vice president of digital media at Pride, subsequently sent his own e-mail en masse to contributors awaiting payment. Rook wrote that the number of outstanding invoices had reached “a much larger magnitude than we anticipated,” but said, “We are committed to making sure your invoices are remedied” and that the company had already begun issuing some payments.
“To be clear, this effectively means we are paying for your services twice (because we already remitted funds to McCarthy to pay you!),” Rook wrote in the e-mail. “We fully acknowledge this is a problem created by McCarthy and by no means your responsibility, however, as a company that runs on tight margins, having to pay so many people again is a real financial burden for us.”
That burden could be why Coyle is now striking a much less conciliatory tone. He alleged to WWD, in no uncertain terms, that Schindler/McCarthy “was stealing money and not paying people.” Pride Media has yet to take any legal action, but Coyle didn’t eliminate the possibility, saying simply, “We’re figuring out the path forward.”
Again, Schindler, who also has yet to take legal action, denied Coyle’s allegation outright and put the blame squarely on Pride, claiming he actually paid around $100,000 out-of-pocket to cover Out’s costs for a time, eventually stopping for the sake of his own business.
Coyle previously called the production arrangement between Grand and McCarthy a “total black box” that he had no insight into when he became ceo of Pride and said one of his first moves was to put an end to the arrangement. Nevertheless, it carried on through September, but Coyle insists that Pride’s end of the bargain was fulfilled.
“I’m by no means excusing anyone,” Coyle insisted, “but I don’t even have a way of knowing for sure if [payment requests Pride is now receiving] are the amounts hired for, agreed to…we’re just getting invoices without ever having seen this documentation before.”
Meanwhile, Schindler maintains there is “no truth” to any of these claims and scoffed at the notion that contributor and vendor invoices could be as high as into the six-figure range as Coyle implied, noting a given issue of Out cost around $20,000 to produce.
While this kind of he said/he said appears destined for a courtroom, the crux of the issue is all of the people caught in the middle — contributors who were never paid. Despite Rook’s e-mail contending that Pride had started remitting new payments directly to contributors, there are still many people waiting for checks (a conservative estimate seems to be around 50, although sources have speculated there could be well over 100). And they’re getting impatient.
There’s been some chatter among contributors — most of whom, unsurprisingly, feel they have no avenue at all for getting paid given the passing of the buck from Grand to McCarthy to Pride and back again — of getting together to file a class-action lawsuit. Two photographers who did work for Out last year, just filed a claim against Pride in Manhattan Small Claims Court, seeking full payment for their work.
Coyle, who is based in Los Angeles, actually made a Thursday appearance in court for this claim, to insist that Pride is the improper defendant. He said the judge agreed after it was made clear that Pride did not acquire McCarthy or Grand and that the judge told the plaintiffs to refile against either or both of those two parties.
A clerk at the court confirmed that the case has a new court date of April 4, but noted that Pride has not been removed as a defendant.
Editor’s Note: This story was briefly amended after its initial publication to make clear that specific revenue figures and projections for Pride represented digital only.
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