ALLCITY CEO Brandon Spano talks layoffs

On Wednesday, numerous employees of the ALLCITY network of local sports websites and shows shared on social media that they had been fired. Awful Annducing spoke with ALLCITY CEO Brandon Spano about this Wednesday afternoon and confirmed that about seven percent of the company’s workforce was laid off to “better align” their coverage with audience and advertiser interests. Here are some contributions from some of those affected:

The old notes app is loading… pic.twitter.com/cvG1Lryo9L

— Ryan Herrera (@ryan_a_herrera) December 18, 2024

Apparently this ends my time with the show and reporting on the rapids for DNVR. Working for DNVR and ALLCITY had some great aspects. Building DNVR Rapids was the most important thing. I will miss that more than anything.

— Mitchell Carroll (@mitch__carroll) December 18, 2024

I am heartbroken but not defeated…… pic.twitter.com/Bxfis5bXBM

– Greg Boysen (@GregBoysen) December 18, 2024

Personal messages pic.twitter.com/bVwhYkr6YT

– Herb Lawrence (@Ecnerwal23) December 18, 2024

ALLCITY, which raised $12 million in Series B funding in August and recently launched a Dallas website centered around noted NBA writer Marc Stein, sent this statement about the changes to Awful Announcement:

“As ALLCITY Network becomes more mature and larger, we must make strategic changes to continue to grow efficiently. Unfortunately, that means key creators were laid off today, and each and every one of them was very important to us. Each of these affected employees was offered severance pay, health insurance and other benefits as part of the restructuring.

“While we want to cover all sports in exactly the same way, the reality is that certain sports attract different levels of audience and advertising interest at a local level and we are shifting our resources to better align with this. These decisions were made based on the large pool of data collected over the past few years.

“That doesn’t mean we’re no longer covering all teams in a city, but it does mean we’re reimagining what that looks like while becoming more conscious of our commitment to it. That means a smarter mix of daily shows, short-form content and tentpole reporting.

“Ultimately, we believe these changes will create long-term sustainability for our employees as we continue to scale and add networks across the country.”

In a phone conversation with AA, Spano elaborated on the logic here. First, he discussed why these layoffs are hitting sports like baseball, hockey and football particularly hard.

“I think that in the early days of ALLCITY we really came into the game and wanted to be able to approach every team in the city the same way and say, ‘Hey, everyone’s going to have three or four guys and this will be the same.’ written, it will be daily.’

“And you know, I think over time you accumulate data and as you scale into markets you start to see trends and realize, ‘Hey, basketball and football shows are doing really well on YouTube, really well on podcasts.’ “Hockey shows are consistent, not huge, but really consistent die-hard fans that buy your merchandise and memberships and watch the shows, but not a big group.” And then there’s baseball, which for us is always very “It was very difficult to gain a foothold.”

While the company as a whole is well-funded, especially after the aforementioned $12 million Series B round led by TEGNA this summer, Spano says the changes are about figuring out which individual shows to broadcast and with what content they earn their money from.

“Ultimately I think we’re at a point where the shows have to be profitable. And that doesn’t mean they have to be in the first year, but at some point, probably within about 18 months, these things have to generate positive cash flow. And I think what ended up happening is that we looked at that and said, “We’re growing very quickly in our revenue department, we’ve rebuilt our finance department, we’re kind of growing up and maturing as a company.”‘

“And I think that you can either sit there and say, ‘Hey, we’ve raised capital and we’re going to grow all these other ones, and we’re just going to continue to grow these areas that are losing money.’ Or you kind of mature and say, “Hey, we can probably cover hockey two-thirds of what we’re covering right now about hockey.” “We can play baseball without any offseason shows.”

“…So that’s where we’re going. I think that’s where most of the change is happening, in these two areas. We let go of an Avalanche guy, we let go of a Blackhawks guy, and then you see baseball kind of reformatted. And we’re looking at baseball more because I think the next phase for us in baseball is going to be more creator-driven a few times a week, video on demand, but not the intense kind of everyday hour-long show for every team.”

Spano said the layoffs (which represent about 7 percent of the company’s workforce) should be viewed in light of the company as a whole, but he understands why they are drawing attention.

“We employ a lot of people in these markets, so it’s a small percentage of the base. But it definitely makes an impact.”

He said layoffs were new for his company, but they were necessary to put it on the right path for the future.

“We’ve never done that before. Even during the Corona period, we never had layoffs before we had even raised any VC money. We haven’t even had a COVID discharge yet. Over the last few years, people have quit or we’ve laid off someone here or there or something like that, but there’s never been any layoffs. But it’s definitely a situation where we have to, you know, if we want to continue to grow at the pace that we’re at and if we expect to enter new markets in 2025, we have to use this model “We need to get it right, and we have to handle it responsibly.”

A major theme of criticism ALLCITY is taking on these layoffs relates to the timing during the holiday season. Spano said this is necessary to establish their plans for 2025, but affected employees will receive severance and continued health care based on individual contracts, with the longest-running benefits running through the first quarter of 2025.

“It’s essentially based on the 2025 plan. And the way we look at it is we have a different plan, we have a new plan for 2025. Every one of those affected employees received severance pay, health care and other benefits like PTO, everything paid, everything.” the stuff as part of the restructuring. So they’re taken care of, none of these people go into Christmas wondering where their next paycheck is coming from or anything like that. Of course they’re going to have to find a new job at some point in the first quarter, but you know, we’ve got these people covered cared about.”

Some other criticisms centered on ALLCITY announcing layoffs shortly after announcing prominent national hires, including Marc Stein and Tim Legler. However, Spano said these new hires fit the model they were going for and that the audience they attracted made them more profitable.

“You see these essentially around football and basketball, probably all around football and basketball,” he said. “I think the big name hires generate the biggest audience. And they are people who allow the sales force to organize meetings at a higher level when there are well-known people with a large audience.”

Spano noted that adding a Dallas location also makes Stein a local fit, and Legler’s numbers have been good so far.

“Marc Stein, for example, plays a crucial role in Dallas, so that was an important point in Dallas. He kind of helped us build Dallas. Whereas Legler, for example, is a national NBA show and that was kind of our first foray into a major national show. And we just thought we had certain personal contacts there and Tim was interested. He is really good at it and this show gives us good viewership. So that made a lot of sense.”

ALLCITY is certainly not the first online sports company to make layoffs or make major coverage changes, even after significant rounds of fundraising. Many of the topics featured here have been featured on other media outlets, including The Athletic, SB Nation, Yahoo, Vice and many more.

But the individual moves (including a particularly harsh setback for Chicago coverage with five layoffs at CHGO Sports) and timing here have drawn legitimate criticism. And beyond that, it’s useful to have Spano on the record explaining why he took these steps here and where he wants to take ALLCITY.