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> “Though BuzzFeed is a profitable company, we don’t have the resources to support another two years of losses,” [Peretti said] This part confuses me. The news

> “Though BuzzFeed is a profitable company, we don’t have the resources to support another two years of losses,” [Peretti said] This part confuses me. The newsroom is a loss, but buzzfeed as a whole is profitable, got it. But if buzzfeed as a whole is profitable even with the news division in the red, what does it mean to say you "don't have the resources to support another two years of losses"?

Markoff 5y ago
I guess it means it's waste of money and they could be more profitable without news division, which is their responsibility to stockholders.
- macintux 5y ago
  Except it’s not. Their duty to the stockholders is to be responsible, not to maximize profits. If they feel their news division is important to the company and the community, that’s a perfectly valid reason to maintain it.
  - manquer 5y ago
    Actually duty to the shareholder is do as shareholders ask . Those things could be responsible or profit maximizing or not. Legally it is hard to define either as they vague and subjective, obeying the board directions is much easier to define and codify in law. If management does not do as shareholders ask , shareholders can get management replaced by nominating and voting for directors who want the same thing in the next general meeting or call for a emergency one. Management reports to the board and the board reports to the shareholders. It is hard to counter the direct wishes of all shareholders combined. However rarely all shareholders want the same thing. Management themselves own substantial shares and obviously will feel different for example.
- russellbeattie 5y ago
  "Maximizing shareholder value" has been cause of more evil in the past 100 years than just about any other philosophy on earth, and that includes fascism.
gaws 5y ago
It's simple: They prefer not to pay six-figure newsroom salaries.
- karaterobot 5y ago
  Maybe I'm being too literal, but if they say they are profitable despite the current losses, then why say they don't have the resources? Clearly they do, in fact since they are profitable they have more than enough resources, by definition. I suppose what they mean to say is "we choose not to devote resources to an unprofitable division".

Markoff 5y ago

I guess it means it's waste of money and they could be more profitable without news division, which is their responsibility to stockholders.

macintux 5y ago
Except it’s not. Their duty to the stockholders is to be responsible, not to maximize profits. If they feel their news division is important to the company and the community, that’s a perfectly valid reason to maintain it.
- manquer 5y ago
  Actually duty to the shareholder is do as shareholders ask . Those things could be responsible or profit maximizing or not. Legally it is hard to define either as they vague and subjective, obeying the board directions is much easier to define and codify in law. If management does not do as shareholders ask , shareholders can get management replaced by nominating and voting for directors who want the same thing in the next general meeting or call for a emergency one. Management reports to the board and the board reports to the shareholders. It is hard to counter the direct wishes of all shareholders combined. However rarely all shareholders want the same thing. Management themselves own substantial shares and obviously will feel different for example.
russellbeattie 5y ago
"Maximizing shareholder value" has been cause of more evil in the past 100 years than just about any other philosophy on earth, and that includes fascism.

gaws 5y ago

It's simple: They prefer not to pay six-figure newsroom salaries.

karaterobot 5y ago
Maybe I'm being too literal, but if they say they are profitable despite the current losses, then why say they don't have the resources? Clearly they do, in fact since they are profitable they have more than enough resources, by definition. I suppose what they mean to say is "we choose not to devote resources to an unprofitable division".