I started doing it and I'm sitting there in the park and I'm like, do I really need to be an [__]?
Not today. Yeah, tomorrow. Tomorrow.
Hi everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.
We're going to do something a little different today and start with a voicemail from a listener who's going to explain the situation. Let's play a clip.
Hi. After listening to Pivot today, I saw that James Murdoch is buying part of Vox Media and I was curious how that might change the freedom you guys have on your various podcasts. Anyway, love your shows. Just finished Burn Book and listen to all your podcasts. Keep up the good work. Jenny from Texas.
Oh, that's a very good question. Jenny from Texas. So, in case people don't know what she's talking about, James Murdoch's company, Lupa Systems, is acquiring Vox Media Podcast Network, New York Magazine, and the Vox site. Um, the other parts of Vox Media, including Eater, The Verge, SB Nation, are becoming a different company, a new independent company. The deal is expected to close in the coming weeks. There's a few legalities and this and that. From what I understand, Lupa Systems has not disclosed the purchase price, but it's reportedly around 300 million. The podcast network is the more attractive asset. We love New York Magazine and it does rather well, um, and love Vox. And so explain, Scott, people want to know what we think about this because a lot of people have bad information. One, first of all, Jim Bankoff is staying as CEO of this unit. Um, it's a spin-off essentially of these assets and which have been fast growing. So explain, Mr. Business. Explain the situation.
Well, about a decade ago, people thought, wouldn't it be great to aggregate kind of this alternative media or build alternative media companies for a new world? And so, BuzzFeed, Food52, CNET, Vice, was it called Mike, Mashable,
And Vox. And back when they thought probably six, seven years ago that if we bring together sort of these good little media assets, some digital, some not, and group them together, we can SPAC it and it'll go public at 1, 2, 3 billion. And so Jim, logically, the CEO of Vox, thought this is a good idea. Bought New York Magazine, had a bunch of very, you know, fast growing websites, Eater, Verge, you know, Vulture, and then started some nascent podcasts, right? And then essentially what happened was the market never said, okay, there was never the bloom came off the rose of all these companies. But basically they're competing against monopolies who extract rents and then their margin was, you know, the margin of all these companies is Google and Meta and Amazon's opportunity and they've slowly but surely sucked the oxygen out of the room. And BuzzFeed from peak valuation to sales price was off 86%. Food52 lost 96% of its value. CNET lost 94% of its value. Vice, I think, basically went bankrupt but sold some assets, was down at least 93%. Mashable off 80%. I mean, just on and on and on and on. Tumblr, my favorite, 1.1 billion to 3 million. Uh, if you're an investor in Union Square Ventures, thank God that the guy with the Caesar's haircut, I forgot his name, was able to convince probably one of the weaker CEOs in digital history to buy his bag of [__] for 1.1 billion.
That was Marissa Mayer at Yahoo.
Marissa Mayer, right? So effectively this has just not worked out. Now what and what to be, you know, Jim, our guy who we like, has always said, Scott, be honest, and always told us to be honest, so let me be honest. They spent a lot of money to create a company with negative synergy. There's some real assets there. New York Magazine is a trophy, iconic asset. Um, the sites themselves, the digital assets actually do pretty well, but again, see above, they're swimming upstream against giants. And then the smaller division that started out as an afterthought has become the growth engine and the crown jewel. And Jim is a smart guy and realized that the whole was less than the sum of its parts and basically decided to break them up into what was going to be three buckets. But my understanding is, and I do not have inside information here, and I don't want it, is that Jim Murdoch or James Murdoch, who wants to be in the media business, said, 'I'll take New York Magazine because I think he likes it and it's an iconic asset. And what I really want is the podcast network, which is growing.' I'll stop there. Where did I get that right?
No, you got that all right. And I think Jim, of all of them, has cannily moved that into a space. Obviously, BuzzFeed, uh, just bought by Byron Allen. Um, you know, they've all, Vice has had a much less happy situation. I don't know where that went. Like there were a lot of them and it was very exciting. And one of the reasons I sold my tiny little site to Vox many years ago, Recode, was because they were ridiculously priced and were sort of pricing me at, I was even a smaller minnow. And so when I got to Vox, um, I understood the ad market was really a problem here. Although we did great, let me just, the only thing you're leaving out is so much great journalism by so many of these sites and so much really interesting independent media. Absolutely. Um, all the Verge, Eater, um, you know, all of them. And New York Magazine just won the National, the General Excellence Award and the National Magazine Awards. Wonderful.
It punches above its weight class. It's like the HBO of magazines is the way I would describe it.
Right. Exactly. It's amazing. Um, and so, uh, so anyway, so it's really nice parts. They're really nice parts, but what happened was exactly what Scott said and what I thought, which is one of the reasons I went to Jim 12 years ago and said, I'm going to start this little podcast called, um, uh, was Recode Decode at the time or might have been something else. I don't remember what it was. And because I really did have an interest in this area and felt it was shifting. And then they added on, Ezra was on there. Um, there's a whole bunch, uh, Today Explained, a bunch of things. And what essentially happened after that, after that I met Scott Galloway and the rest is history. Like we've done really well.
Bald man with the erectile dysfunction. Murdoch, it just all makes sense.
In Germany, in the Murdoch.
In the Murdoch, and I worked for Murdoch. So rich, isn't it? How did this happen?
I know, right? I know people are thinking it's very funny for me, especially because I knew James from a million years ago when he was actually around for digital stuff, um, very early when I was covering the early digital industry, and he tried very hard to move his family's company digitally. But Rupert always did something idiotic, like whether it was the way they handled MySpace or there was so many, I can't even tell you. I just, like Disney, they had 19 of these things, and especially the iPad news thing that I thought was ridiculous. Um, and so we left the Murdoch Empire largely over, um, Rupert, over problems. He was doing all sorts of nefarious things and we wanted to come out on our own. Um, and then ended up selling to Vox, and so everything comes around essentially. I met Scott, we built Pivot, and we built each of our other stuff on, and all the Prof stuff, which is wonderful. Um, and over time, in our recent renegotiation, we became partners with Vox, and they sell our advertising. They help us mount the events, which they're excellent at. And Scott has his own way of doing things. He just started a great Substack, and so it's a really actually fertile time. But there's all these different configurations. And I would say for people to understand, they are, we, I have met with, uh, James Murdoch and, uh, his wife, um, Catherine, who is also very involved in this. Uh, I have nothing but good feelings for them. I don't have good feelings for his father, neither does he, um, which has been well documented. Um, and so we have complete freedom to do what we want. We own these podcasts that we have. Scott owns his, I own mine, and we own Pivot together in a, um, in a death grip to the end for whoever, whichever one of us survives. Um, and, uh, and so we'll keep doing what we want, and we really like working with Jim. We, and now this other Jim, and, uh, and the rest of it, and we hope there'll be more, you know, synergies between them. We're not like a total believer in all synergy, but they've got some cool, uh, things like Art Basel and, um, a number of, number of film festivals, which I'll be at, uh, interviewing Marc Maron on stage. And so there's lots of opportunities here, but mostly it's not going to change from, you know, not going to change our deal. We like the deal we got. Um, we again own our things, and so, uh, we're happy to take suggestions from, you know, the same thing, like Jim will suggest something. We'll either ignore him or we'll not, like he might have a, he just had a great idea this morning for me. Um, and I'll take it. Uh, so, and I really do think of James Murdoch as always been very smart digitally. I think, um, uh, I think we like him. He's not, you can't just put Murdoch on it and say they suck. I would agree about Rupert Murdoch. I would not be owned by Rupert Murdoch, and, uh, and we're not owned by anyone. So I think that's it. Anything else?
Well, when Reuters called me, I said, 'Look, we like the Jims, and we have, you know, we have a lot of power here, and we didn't ask for anything. We just asked for everything to stay the same.' Pivot is a joint venture between Swisher, Galloway, and Vox. You own, I own Prof G, but both on, and Prof G uses Vox for, we do a revenue split where they sell our ads. And if we could have, I mean, this is going to sound self-absorbed, we could have killed this deal. And we didn't. And we just, we didn't ask for anything extra. We just said, 'Yeah, we just want things to stay the way they are.' And Jim Bankoff has never once asked me to tone it down, to stop the dick jokes, to reconsider.
No, you have. But you're trying to save me from myself, and you're also posing for your woke friends.
Oh, stop it. You're so much woker than me.
Anyways, I'm so much woker than you. I'm the woke.
But let me go to just some of the learnings here. And basically, the business model for tech has been: find, have great technology, find a very compelling leadership team that's able to craft a narrative to raise more capital than anyone else, deliver an unbelievable product at below price, and then consolidate the market, and then start sucking the oxygen out of the entire ecosystem. So, let me give you an example. And then everybody else gets crushed. Google and Meta have been increasingly pushing users away from external sites in favor of their AI overviews, which they can monetize. So, HuffPost, between 2022 and 2025, so basically the last three years that we have data on this, HuffPost's organic search traffic has been cut in half. The Washington Post down by nearly half. Business Insider has seen their organic traffic cut in half. NYT organic search as a share of their total traffic fell from roughly 44% to 36.5%. And the Wall Street Journal's organic search as a share of their total traffic fell from 29% to 24%. And let me just go back in history and pat myself on the back. In 2006, when I joined the board of the New York Times, and literally my first meeting, I said, they said, 'Okay, you're the digital guy, what do we do?' I'm like, 'Shut off Google. Don't let them crawl your content because eventually they're going to commoditize your content, right? Stop driving traffic to us, and all you're doing is building them into the ultimate toll booth.' And Martin Nisenholtz, who's a very smart guy, said, 'Well, if we can't figure out a way to compete against Google and we're making money from the traffic they send us, then shame on us.' I'm like, 'Yeah, go to Murdoch, go to the New Houses, go to the Financial Times, and consolidate and turn off Google, and then license your content to the highest bidder.' And at that point, Microsoft had Bing, and we would have been able to get a lot of money and say, 'Look, if you want to crawl this gorgeous content from Thomas Friedman and from Vogue and from the FT, you got to pay us.' But instead they said no, we like the traffic. They were pursuing this eyeballs thing, and now it's way too late, and these companies are the internet, and very few people go directly to the New York Times.com. They get served stuff on Meta. That's how they decide where they're going, or the Google is now entirely, they don't take you to the best place. They take you to a place they can further monetize. And Jim, you know, Jim has managed to get on the last helicopter out of Saigon.
Oh, wait. Do you want to hear some of the threads I thought of? I thought I'll be, I'll test the limits of our new ownership. I was walking around Lisbon yesterday and it was beautiful and I was bored. So, as soon as I saw the announcement, I thought, I'm going to test the limits of my freedom. My first thread, my first thread was: alternative media is like a vegan restaurant. Virtue signaling loses money and a billionaire bails you out. That was my first one. My second one was that picture of Jim Bankoff and James Murdoch where it looks like the 30-year reunion of Abercrombie and Fitch. They're both very handsome.
And I wrote: Romy and Michele's High School Reunion 2: Post-Transition. That one I'm especially proud of. And oh, okay, last one. And then we... What was my third one? Oh god. I wrote something about, oh no. It just, you know, late, late-stage capitalism. But anyways, and then I started doing it and I'm sitting there in the park and I'm like, do I really need to be an [__]?
Not today. Yeah, tomorrow. I'm like, give them their moment.
They'll be an [__] later before we start making their lives difficult.
No, you know what? Let me just end this because we got to end this. So, two things. Jim B, he said, we can say whatever we want. I don't see that problem from James Murdoch or Catherine Murdoch at all. They might be irritated by us, but there's going to be no change in that. And let me be, I hate to say this, but Rupert Murdoch never asked me to change a thing. Like that is one thing I never experienced when I worked at the Wall Street. I just don't, I think he's a heinous piece of, well, I think he's heinous the way he's done Fox News and the other stuff, but and has degraded democracy quite a bit, but he's not, James is not him. And so, but that said, and Murdoch never meddled in my stuff, and he certainly could have for my entire time there. I just didn't like him. But one of the things we have to say, we get to do what we want. We will do what we want. And also just, I know Scott was sort of putting a sort of an ugly picture on it, but actually New York Magazine is profitable. So are the podcast networks are doing great and very profitable. A lot of these websites are. So it's not like it's just not a, like a, it's not a crazy business, but it's not, these are not suffering properties. And last of all, a lot, many of them, most of them provide amazing journalism. And I think David Haskell deserves all due credit for New York Magazine winning that award. And awards are one thing, but they certainly, they were up against some amazing journalism this year from The Atlantic and from ProPublica and Wired. So they're very good property. He's bought some good properties here in that regard. It's not, they're not falling knife properties. But we'll see what we can do. Let's see what he does.
They make money, but the crown jewel, shockingly, of all this is the podcast. New York Magazine is a vanity asset.
It is, but it does. Okay. It doesn't, it's not, it does fine.
You become one of the sexiest men in Soho when your rap is, I own New York Magazine.
We're going to stop there. It's a very, it does journalism too. Anyway, that's... So is NPR. It doesn't make any money. Yeah, but this one does. So, anyway, speaking of things not making money, we have some IPO news to get to. First up, SpaceX has filed an IPO prospectus, and it is revealing the company brought in $791 million in profit in 2024. It swung back to $4.9 billion in losses in 2025. For context, 200 companies in the S&P 500 had more revenue than SpaceX last year, including Tesla. Also revealed in the filing, by the way, they buy a lot of stuff from Tesla. There's a lot of round-tripping happening at these companies. It also revealed, all controlled by Elon Musk. It also revealed in the filing, Anthropic is paying SpaceX, and thank God for it, $1.25 billion per month through May 2029 as part of the compute deal that the two signed, meaning Grok will not be using that space in Colossus 1 and 2. SpaceX is reportedly targeting a $1.7 trillion valuation. I mean, it goes on and on and on. A lot of these, a lot of words like, um, human, I don't know, like connection, there's AI mentioned a lot. Just, this business is not economically, and mass speaking, it's not worth 1.7. I mean, it's just the Elon, that guy gets a lot of credit for using this number because even the stuff they're promising seems problematic, but he's not, he hasn't done it before. He just moves from one lily pad to the other in terms of from Tesla to this. But the big winner in this, in that I read, is Starlink does great. The others, Grok and the rocket company, is not so much. Go for it.
Okay, good. I can't wait. I'm excited.
Yeah. What was... Spit it out, Scott. At 3:00 a.m. I was reading the S-1. What were you doing?
First off, I have some notes here. The first 14 pages of the S-1 are pictures of rockets. AI is mentioned 1,200 times in the S-1. There are 277 pages of the perspectives. For context, it's longer than The Great Gatsby and The Catcher in the Rye. And some direct quotes from the filing. These are direct quotes. 'We do not want humans to have the same fate as dinosaurs.' Well, thank God you're here, Elon. 'For decades, a reality where humanity travels between the planets and the stars has felt tantalizingly close. But still...'
Would you mind if I ate my protein bar while you do this? Because I'm hungry and I also am fascinated. Keep going.
For decades, a reality where humanity travels between the planets and the stars has felt tantalizingly close, but still locked in the pages and screens of science fiction. 'The sun contains approximately 99.8% of the solar system's energy. And as a result, we believe it is the only truly scalable solution to terrestrial energy constraints in the age of AI.' Oh, Jesus [__] Christ. All right, hold on.
'We believe the next paradigm shift for humanity is the creation of a resilient, perpetually expanding, space-faring civilization. Ultimately...'
Sexy voice, please. I mean, I need a more sexy.
Ultimately preparing us to Kardashev Type 2 status, defined in the filing itself as a civilization that harnesses the full energy output of the sun. Remember, Meta's mission was to elevate the world's consciousness.
Yes. No, this seems like he sounds like a maniac. He sounds like a maniac, but go ahead.
So let's talk about the numbers here. Headline valuation 1.8 trillion. They're whispering they can go out at two. That's roughly the GDP of Canada. So let that marinate. The core business is genuinely an excellent business, right? Starlink generated 3.26 billion in revenue in a single quarter with 1.2 billion in operating income. That's 36% operating margin on a monopoly satellite internet business with no serious competitors in sight. It's a great business. If this were the whole company, it would be one of the great businesses of our era. And then, but the problem is it's not. Stapled to this rocket ship is xAI, a business that is clinically speaking a money furnace. In 2024, xAI lost 1.6 billion on 2.6 billion in revenues. By 2025, losses ballooned to 6.5 billion on 3.2 billion in revenue. So revenue went up 20% but losses went up 310%. That's...
Can I ask you quickly, these revenues don't seem like killer. It's 30%. It's not like wow. They're not wow growth, right? It's sort of good, solid. Am I wrong there?
No, it's... Well, let's just talk about SpaceX, the best business. It's growing 20% a year and it's trying to go out at 100 times revenue. When Google went public, it was growing 240% a year and went out at 10 times revenues. So, just back to xAI. xAI is losing money on the way to losing more money. In Q1 2026 alone, the net loss of 4.3 billion on 4.7 billion in revenue. Total capex 10.1 billion in 90 days, 7.8 billion of that for AI. Cash on the balance sheet cratered from 25 billion to 16 billion in just three months. They burn 9 billion in cash in a single quarter. That's a hundred million a day. That's not investing in the future. It's the future billing you in advance, right?
