- Millennial-news network Cheddar was a bright spot in media last year when it was acquired by cable company Altice USA for $US200 million.
- The company has since had layoffs amid the pandemic and consolidated its two channels.
- Business Insider spoke with Cheddar’s founder, former employees, and analysts about the future of the “post-cable-network” model the company was built on.
- Visit Business Insider’s homepage for more stories.
In April, Dexter Goei, the CEO of Altice USA, and Jon Steinberg, the founder of Cheddar, virtually addressed a crowd of curious and apprehensive Cheddar employees.
This was a rare joint appearance by the millennial-news network’s two leaders since Altice acquired Cheddar for $US200 million in 2019. With layoffs sweeping across the media sphere and everyone working remotely because of the pandemic, staffers scrambled to log in to Microsoft Teams for the Altice-hosted videoconference. (The Cheddar team still used Slack, a holdover from its independent days.)
Steinberg, whom insiders have described as charismatic, relatable, and always looking to the next big thing, focused on the positives.
“They went through slides showing how great viewership was doing across the platform because of COVID,” one former employee Business Insider spoke with. “There was no language in that to indicate that there would be mass layoffs.”
The calls came an hour or two later. Staffers across the newsroom were laid off and furloughed, including Cheddar’s entire Los Angeles bureau and producers and anchors who worked on long-running shows like “Opening Bell” and “Closing Bell.” The cuts were across Altice.
Three sources estimated that Cheddar’s staff was slashed by 30% or more, which would be a substantial share of the once growing operation. Altice said Cheddar now had 160 newsroom employees but declined to confirm the scope of the layoffs.
Multiple Cheddar insiders said they were stunned by the layoffs, with one describing them as a “horrible shock” and another saying they “came out of nowhere.” Layoffs are common after mergers as companies eliminate staffers doing the same jobs â€” but these, more influenced by the pandemic, caught staffers off guard.
The meeting drew a sharp line from the old Cheddar, the startup where Steinberg, who calls Cheddar his “baby,” shared key financials and ad-sales figures in weekly town halls, the former staffers said.
Cheddar isn’t a startup anymore. It’s part of Altice, which has become the US’s fourth-largest cable operator since being spun out of a European telecom giant.
“It makes me feel terrible that people were caught blindsided,” Steinberg told Business Insider of the layoffs. “I had hoped I never would do a layoff, but I think we handled it with decency.”
The Altice acquisition was a successful exit at a time when other new-media outfits like Vice were struggling, and a lifeline for Cheddar after spending much of its four-year history chasing monetisation â€” first on platforms like Facebook, then on streaming pay-TV providers like Sling TV, and recently on free ad-supported streaming-TV services like Pluto TV and Samsung TV Plus.
But, after the layoffs and Cheddar’s shuttering of its second network, some insiders questioned how much Altice was willing to invest to make the millennial-news network a household name, as it leans on Steinberg and other Cheddar leaders to build out its other news and ad businesses.
Roughly 16 months into the merger, Business Insider spoke with Steinberg, seven former Cheddar employees, and analysts about the future of Cheddar’s “post-cable-network” strategy within Altice. The people described a scrappy operation that has moulded itself to every potential avenue of distribution but whose path forward still faces hurdles beyond the company’s control.