SpinMedia, the financially stressed network of pop culture websites formerly known as Buzz Media, has hired Piper Jaffray to explore options as sources say its venture cash has almost run dry.
The company, which has promised that it would reach profitability for the past several years, is apparently still bleeding red ink and has had three different CEO’s in less than a year.
“We hired Piper Jaffray several months ago,” confirmed CEO Dale Strang when reached on Thursday. “We expect to be profitable on a quarterly basis in 2014.”
Of course, that was the same thing the previous CEO, Steve Hansen, had said in early 2013 as he undertook a major downsizing, and he was ousted in September.
Hansen himself had previously been elevated from president to CEO at the end of 2012 because the past CEO, Tyler Goldman, had delivered a growing number of eyeballs, but no profits in 2012. Goldman was booted upstairs temporarily as chairman and then quietly left the company a few months later.
Hansen tried to curb the spending and trim the staff, but the burn rate still outstripped the revenue and by September, just over 10 months into his reign, the board booted him.
Strang hooked up with SpinMedia when it bought out Vibe Media in 2013 from the joint venture that teamed ex-NBA star Magic Johnson and Ron Burkle’s Yucaipa Cos. with Leo Hindrey’s InterMedia.
He was elevated to CEO last September when Hansen got the boot. Strang engineered a big downsizing in October 2013 — the company’s second of the year — when more than 30 people were let go.
As the editorial staffs were cut, however, the sites began to attract fewer unique visitors. Recent comScore numbers show that its number of unique users in November, the last month for which total figures are available, slipped to 26.8 million, down from a peak of 34.5 million back in March 2013 — a 22.3 percent nosedive.
Its sites, aside from Vibe and Spin, include Celebuzz, The Superficial, The Frisky and dozens of others. “It’s a brand graveyard,” said one industry source. “It’s sad.”
Sources said that Piper Jaffray had lined up three potential suitors for the company but so far none has pulled the trigger on a deal.
Chief Financial Officer Scott Southron has been telling afflilates and partners that the company is hoping to “recapitalize” very soon, according to a source.