Out magazine has been through more than its share of ups and downs this past year, and it’s down again with the loss of its editor in chief.
Phillip Picardi, who last year left as editor of Condé Nast’s Teen Vogue to take up the editor in chief position of Out, is stepping down immediately, WWD has learned. His exit comes after several rounds of layoffs, severe pay and budget cuts and a recent reduction in print frequency (to six issues from 10), along with ongoing issues of freelancers not being paid. It’s thought that Picardi is not going to another publication.
In a statement, Picardi said his year at Out was “the most complex chapter of my career so far,” but that it was “an honor” to lead the magazine and his diverse stable of staffers and to see traffic double, even on a “shoestring budget.”
“Every day of this work has been a challenge,” Picardi added. “I’m proud to say I did all that I could, with what I had and where I was and I truly gave it my all. My only hope now is that I leave this publication better than I found it.”
Orlando Reece, chief executive officer of Out’s parent company Pride Media, is also stepping down, WWD has learned, due to the company’s financial straits. Zach Stafford, editor in chief of The Advocate, which prints six times a year, is leaving, too. There is said to be no immediate replacements for any of the positions, although Reece and Stafford are expected to stay on through sometime in January. Stafford also started this year as a cohost of “AM to DM,” a BuzzFeed morning show that runs live online. Reece will be overseeing yet another round of budget cuts and layoffs set to begin this week. More Pride executives are said to be stepping down, some with immediate effect and others over the coming weeks.
As for Picardi, he was thought of as a rising star within Condé and a favorite of company executive and Vogue editor Anna Wintour, but took a risk for a bigger job at Out magazine. He successfully evolved the look of the print product and made the online content more frequent and engaging for a younger LGBTQ reader, but it was ultimately for naught. He was lured over by Pride’s first ceo Nathan Coyle, who quit earlier this year amid growing issues around editorial pay and freelancers being stiffed for their work. Coyle was said to be leaving to take over as ceo of Ford Models, but he never took up that position, and instead joined as a consultant. Ford has yet to clarify who is actually leading the agency.
The financial issues dogging Out for at least the last year are not exclusive to it and The Advocate, but are said to run through its parent company Pride Media. Pride is a holding company formed shortly after Adam Levin and his other company, Oreva Capital, in 2018 bought the titles from Here Media. Out, founded in 1992, and The Advocate, founded in 1967, are two of the only and most-high profile LGBTQ publications in operation today.
Now, with no editors and even further reductions to an already small staff and budget, insiders are wondering whether or not either publication will continue operating at all come next year. Although Reece is said to have brought in a deal for outside investment in Pride several weeks ago, it purportedly fell through for reasons unknown. Earlier talks with interested investors, as reported by WWD, were also unsuccessful.
Earlier this year, Levin denied outright that he was looking to sell the titles, was considering a possible bankruptcy filing, or that he was thinking of taking the publications to an all freelance model in order to further cut operating costs — all options insiders said were indeed on the table. Sources said Levin had even put a price on the assets of $20 million.
Despite executive efforts to pin Pride’s troubles on previous leadership, many freelancers are still claiming they have not been paid for work that was published weeks or even months ago. The issue of non-payment has been ongoing all year, with staffers and freelancers writing an open letter in February and Picardi at one point threatening to quit if the situation was not addressed by executive leadership.
Levin told WWD in June that Pride had already hit $10 million in revenue for the half-year so far, putting it on track for its “highest-grossing year in many years.” He added that earnings before interest, taxes, depreciation and amortization were expected to hit $4 million this year. If those numbers were realized, clearly it wasn’t enough to cover Pride’s operations or the company’s mounting debt position. Levin could not be immediately reached for comment on the departures of Picardi, Stafford and Reece.
As previously reported by WWD, in order to acquire Here Media, Levin’s Oreva took out a high interest loan between $10 million and $15 million from ExWorks Capital. But Oreva/Pride is said to still be missing interest payments, another signal of a lack of cash flow.
Insiders are again speculating that a Chapter 11 bankruptcy filing or a Chapter 7 liquidation filing could be in consideration. Such a move would offer Pride an escape from mounting costs and any unpaid freelancer debts, debts to third parties (some of which have already sued Pride for payment), as well as any laid-off employees seeking agreed-upon severance payments. The company’s only secured claim would likely be ExWorks. While such a process could leave the assets up for sale to a potential new owner, a bankruptcy would also leave open the possibility of Levin trying to buy the assets again with a new holding company. Peter Brant did this with Interview magazine and Levin tried and failed to do this in 2018 during the bankruptcy of Penthouse magazine, which he had a stake in.
Levin through Oreva is also the owner of High Times Holdings, which publishes a cannabis-focused magazine of the same name that is facing major cash flow problems of its own. Although High Times has been attempting for the past year to go public through a federal Reg A+ filing, essentially a regulated crowdfunding campaign (something Levin was said to be planning for Pride, too), it has not raised nearly enough money. Last week, the company warned in an SEC filing of “substantial doubt” that High Times could continue as a going concern. Other filings found earlier by WWD show that Oreva took out another loan from ExWorks worth $13 million to fund High Times.
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