For the first time in the history of the startup sports media company, ALLCITY Network engaged in a round of layoffs. The enterprise laid off 16 employees ahead of the holiday season, which equates to approximately 7% of its total workforce, and comes months after a Series B funding round led by TEGNA raised $12 million. The rationale for these changes related to data demonstrating that content surrounding hockey and baseball was not resonating as closely with the audience. On top of that, the company is solidifying areas of its business operations, including revenue and finance departments, while positioning itself for ongoing, viable growth.
Brandon Spano, the chief executive officer of ALLCITY Network, understands that the timing of these changes do not facilitate strong public optics, but he knew that it would make the most sense from a business and personnel standpoint. Spano and his team would have liked to get this done a few weeks ago, but logistics related to human resources and legal procedures slowed the resolution. The company has paid everyone affected through the rest of the month, providing severance and a stretch of health care coverage. In fact, many of the employees will be receiving pay for the entirety of the first fiscal quarter.
“This is not a warning cry or anything of that nature,” Spano said. “This is simply us responsibly reallocating capital into areas that generate positive cash flow for the company.”
ALLCITY Network has been focused on implementing a new content model in January that will include diminished coverage surrounding baseball. Spano explained that shows will need to be reformatted if they are considered to be mature and are not generating profit, something that heavily impacted baseball content. Since the most-recent raise, which pushed overall funding for the company above $25 million, the company has measured and assessed more comprehensive intel and insights that can alter paradigms.
“I think that this decision was made because it is the best thing to do for the company, and we have a lot of data and information, and we’re trying to create something that lasts for a very long time that can grow into all markets,” Spano said, “and yeah, whether you raise money or not, I think that you always have to be thinking about those things.”
The layoffs are spread across different markets as the company enters 2025 with a refined content strategy. Greg Boysen, Vinnie Duber, Ryan Herrera, Herb Lawrence and Nicholas Moreano were the on-air talents impacted by this cycle at CHGO Sports, as first reported by Jeff Agrest of the Chicago Sun-Times.
Other staffers around the country revealed that they had lost their jobs as well. Among them were Mitchell Carrol in Denver, Jesse Friedman in Phoenix, and Renee Washington and JP Zapata in Philadelphia. The full list of those impacted has not been shared. Spano does not feel that the immersion of ALLCITY Network into new markets has occurred too quickly, and remains optimistic about the outlook of the business.
“I would say that this is just a matter of maturing and growing efficiently and that it does not change anything about our ability to scale,” Spano said. “If anything, it allows us to scale in a healthier manner.”
The fundamental message being communicated to employees and shareholders is that the company is going to commit capital to parts of the business that demonstrate growth potential and are able to generate positive cash flow. ALLCITY Network currently operates in five markets, the most recent of which is Dallas and opened over the summer. Spano said all markets have run cash-flow positive months this year and that the goal is for every market to be completely profitable and run in the green through 2025. ALLCITY Network initially launched in Denver five years ago and has since expanded to Phoenix, Chicago, Philadelphia and Dallas, along with presenting national programming.
Last month, ALLCITY Network announced a new partnership with Samsung TV Plus, The Roku Channel and Xfinity to create free, ad-supported streaming television (FAST) channels with content from its first four local outlets. There are more plans for growth in that area in 2025 as well, along with areas on the production and social media side of the business. ALLCITY Network is also targeting to open at least one new marketplace in the forthcoming calendar year and wants to be the No. 1 digital network in the area on the day that it opens. Moreover, it will evaluate the digital infrastructure and examine opportunities to acquire assets to take part in new projects.
“There are two markets that we’re very keen on that we’re going to look at opening,” Spano said. “We have to kind of determine what that looks like. A lot of things have to go right for you to get one of these opened and positioned correctly, but we’re really excited about the opportunity there.”
The company will have shows broadcasting live from Media Row in New Orleans ahead of Super Bowl LIX, and Spano anticipates having multiple tables at the venue. ALLCITY Network has traditionally had big weeks around that time, and it hopes to maintain that trajectory as its membership continues to grow. The game happens to coincide with the ongoing basketball and hockey seasons that the network will continue to cover.
“I think that hockey is still strong for us, and we’re still going to commit there; we still have daily shows there,” Spano said. “There’s just some areas where we were spending more than the show was making simply, and if we’re able to remove a host or take someone to part time in that area, then that show becomes a positive cash show.”
Spano emphasized that metrics such as audience, programmatic advertising revenue and direct advertising revenue have guided decision making. ALLCITY Network can no longer cover teams with the same resources as it covers others, recognizing that varying levels of resources need to be equipped towards different sports. These decisions were made based on the data that was accumulated, creating a feasible portfolio of short-form and longform offerings with event coverage. The company also has other facts of its business that involve holding events, selling merchandise and producing written content.
“We’ve been able to grow our membership business line at a really high level here, especially in the last quarter or so,” Spano said, “and it’s very telling on that side [with] even what stories are converting membership and what aren’t. And so this is simply just a proper cash reallocation.”
With this layoff cycle, Spano contends that ALLCITY Network is acting conscientiously towards employees and shareholders, enacting a plan that is focused on both the present day and the future. The business has made strategic hires over the last few months and continues to do so, recently bringing in more account executives to work with clients. ALLCITY Network is on pace to finish the year with strong revenue while adhering to a commitment to create a business that can improve the sports media industry in local marketplaces.
“The company is operating in a responsible way that a lot of media companies before us have not,” Spano said. “This is a company that has never done a layoff cycle in nine years – this is the first time we’ve ever done one – and it comes from data-backed decision making that solidifies the job of many other people that still work here. This plan is not just for now – this isn’t just a, ‘How do we save now?’ – this is also a plan that impacts how we launch new markets and being able to open new markets sustainably.”
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