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Economics or stupidity: 1UP podcast firings to save UGO $2.5 million annually?

1:50 AM on 01.07.2009 // Niero Desu
  @destructoid

I remember walking down the hall of the Los Angeles Convention Center as I watched a white glossy banner pass over my head with a logo I already knew all too well. I guess a lot of us tonight are having similar memories. Yours might include a favorite review or cover art. Maybe a podcast. I didn't even work there or know most of those guys that well, and I'm finding myself extremely nostalgic and in a fuss about it.

You know, I was going to let the whole 1UP buyout sink in overnight and hope to awaken with a yawny fat optimistic face. Instead, I'm anything short of restless. It's 4 AM and find myself bristling in my room in disbelief repeating the same words over and over in my head:

My favorite childhood gaming magazine is dead. Fuck.

Some of the most talented people in games media were fired today (or coincidentally quit, as Shane blogged it), as Ziff Davis folded the business to Hearst's wannabe-IGN, a polished me-too men's interest portal that once stood for "Underground Gaming Online" but has since lost its way. The CEO said that picking up 1UP would basically finally let them buy some personality, but they ironically fired most of it on day one, causing a ten-page Internet trainwreck in their announcement thread. Despite letting go key podcast production staff, Sam Kennedy told MTV that they're going to try to maintain some semblance of a media program:

Will we have as many shows as we have in the past? Probably not, but we have – we’ve had – a lot of ideas for future shows and we’re pretty excited about what we’ll do in the future. Right now, we’re going to go through the process of really figuring out what kind of shows and products we want to keep going in the future. Our intention is to keep as many going as we can.

Nevertheless, 30 good people were let go. While many are busy flaming UGO for being money-hungry pigs with no intentions, I began to ponder the economics of the firings and did a little (highly flawed) research to dig into how an incredibly stupid call like this might make any sense in the books. I dared to piss in the wind and found numbers that sound probable.

We all know that San Francisco is not a cheap town. 

According to salary aggregating service PayScale (who claims to have surveyed over 22,000 people), the median salary for seasoned Web Geeks is in the $50-80k range and upwards of $100k for director-level positions. Multiply that times 30, then add the cost of equipment and studio space, and you're easily looking at $2.5 million annually. That's a lot of ads to sell for free podcasts to break even. Unless money was being thrown at them by listeners, that team should have been disassembled a long time ago and put towards other, more profitable enterprises within 1UP. Common sense.

Thus, Ziff clearly ran the expensive operation in an attempt to win market share, but couldn't stay the course of their flawed economics. What podcast or magazine can ever hope to break even on on that kind of money in this economy? The media arm would have to do all the grunt work to turn a profit... and that's what UGO kept. Smart. Dickheaded, but smart. We knew they were gonna go. It was obviously a long time coming. And yet, it doesn't make any of this easy.

I'm now less upset at UGO for being lame and furious, and more upset that a reputable group of suits like Ziff Davis could be so bloated and mismanaged. No wonder they filed for bankrupcy. The unfortunate people whose talents could have been put to better use will be forced to move on -- hopefully with little difficulty, as many are household names to people involved in the industry. While scouring through the riot of fan outcry around the Web, one of our editors compiled a list of all of the rumored firings:

Yamaguchi, Marci
Cox, Simon
Convertito, Monique
Donahoe, Michael
Pinkham, Rosemary
Wilson, Jason
Bettenhausen, Shane
Ford, Greg
Gallegos, Anthony
Mielke, James
Bertrand, Jason
Bowen, Robert
Chandronait, Matt
Fitch, Andrew
Frechette, Justin
O'Donnell, Ryan
Pfister, Andrew
Quintero, Cesar
Scott, Ryan
Serrano, Rey
Varanini, Giancarlo
Frieg, Adrian
Garcia, Andrea
Gelfand, Leslie
Jaramillo, Jervilyn
Madu, Ndubuisi
Moran, Amy
Steel, CoyLou
Stowe, Meredith
Ubbelohde,  Tipler
Boothe, Norris
Chinn, Derek
Ellis, Eric
Ross, Tammy
Tong, May
Mishra, Amy
Parsons, Doug
Rosa, Christina
Suttner, Nick
Kollar, Philip

Unbelievable.

If I can feign any optimism at this hour, I can say that where there is crisis, there is hope. Everyone at Destructoid wishes those guys the best. I strongly recommend fans to download the old podcast episodes before uncle UGO yanks them.

Despite the gloom and doom, I'd like to remind everyone (and try to make myself believe it this time so I can go to bed) that we all thought 1UP was going to suck ass and die years ago when Ziff Davis picked it up, and they instead produced a better product in the end. Sam Kennedy will still be at the masthead. UGO is sitting on a mountain of old money and people that appear to have the basic understanding of a calculator. This could provide a more stable future for 1UP despite the chopped heads. That's really the best I can muster to say.

Tonight has also forced me to look at our own economics.

As a micro-publisher of a smaller site, it makes me wonder what I could possibly do to prevent a similar fate down the line. This makes every challenge and drama I've faced at Destructoid seem a little petty in scale. I hope everyone who operates a gaming Web site -- or does anything for the love or enthusiasm of it -- takes a good, hard look at how one of the most loved legacy brands spun out of control and let its overhead walk it out the door. I can't stress enough how important it is to remain independent for as long as your frail little brain can bear to protect your readers from completely losing the things they've come to love.  

And there it is. I know what's finally keeping me up. I'm afraid it might someday happen to Destructoid, too. Hey kids, turn off those ad blockers, won't ya?

*Knocks on wood, calls it a night*



Niero Desu, Blogsmith
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