(Author’s note: What follows is a relatively short summary of piecemeal conversations Glenn and I have had about Conservative Media over the last number of years. For the most part, the thoughts are ours, but the words are mine. It’s possible that I have accidentally taken his words or used his thoughts incorrectly. My apologies in advance for any oversights — I will be sure to make comments post facto. This is related to Glenn’s post, "A Heavy Heart and the Road Ahead.")

What does success look like?

If you are an entrepreneur, this seemingly simple question may be hard to answer. And no one even tells you to think about it, let alone helps you define it.

Is it top-line revenue? EBITA? Cash flow? A liquidity event? Influence and relevance? Doing good in the world? Some combination of all these things? Or will you just “know it when you see it”?

Failure, on the other hand, is easy to define.

When I joined Glenn coming up on three years ago now, we didn’t have a clear definition for success. For some of our business lines, the definition is obvious. For others, less so. At this point, here’s what I know: 

I am certain that TheBlaze is not a failure, yet I am equally as sure that TheBlaze is not a success.

I know that success, however defined, must reflect the three principles that got Glenn and this company to where he is today: transparency, humility and humanity.

The only way a media organization can earn trust is to be worthy of trust. For the people who already believe we try to be the best we can be, thank you. For those who don’t yet, or who think they never will, maybe this will help… or maybe not.

Today, Glenn announced we are laying off about 20 percent of the combined workforce of Mercury Radio Arts — with the majority of those impacted working at TheBlaze. We are doing this for a number of reasons. Glenn touches on several in his post. I would like to touch on a few more and go a bit deeper.

  • Glenn is a self-described catastrophist (though a hopeful one) and is drawn to the challenges in front of us. It is both a blessing and a curse for someone who spends so much time reading history to be able to recognize patterns they have seen before. The decisions we made today were predicated on our trying to figure out what comes tomorrow.
  • “Conservative Media” is down across the board from what we can see and what we are hearing. We are not immune.
  • The media industry, profitable or otherwise, is in disarray. And, like everyone else, we are going to be part of the problem or part of the solution. Currently, we are not part of the solution.
  • When TheBlaze started, it was important for it to look and feel as polished and “professional” as the big boys. Maybe that was true then, or maybe we projected something that was unnecessary at the time, but today, “polished and professional” often feels inauthentic, which can be deadly when authenticity is king. Because we believe authenticity is about removing the artificial filters between our content and the audience, we are drastically changing how we produce content (less studio shoots, control rooms, and PEDs[SJ1], for example).
  • Glenn is a content creator, that is his unique skill and passion. Everything else we do is to support that gift, but nothing else we do is unique to us. We have to hone that gift and focus on making it better, rather than attempting at being the best (or good enough) at so many different things.

I won’t do all (maybe any) of these topics justice — as Glenn mentioned — this was going to be an eight-part series we were working on together, but I hope it provides some context for our thinking going forward.

The Media:

I think it is historically accurate to say that the media has always skewed left, at least by some degree. I think — besides his significant talent — it is why Rush became Rush. He was the antidote to the “drive-by” media. But as we fast-forward through the 80s and 90s and 00s, does anyone, feel that the media has just “skewed” a couple degrees? I’m not suggesting that you ask someone from the right. Ask anyone. Of course those on the right will answer “yes”, but I believe many on the left agree. I read the same polling data you do — the Democrats trust the media more than the GOP, and I understand that. But if you look deeper into the data and you look at who is trusting what, I think it is obvious that the relationship between the public and the media is in a terrible place — regardless who is to blame. I am not making excuses for the media (or for Glenn — he has apologized enough for any one person for their role). I am just stating the facts as I see them.

What we can all agree on — I think, I hope — is that a media outlet that is actually trusted, knows the difference between fact and opinion and has no agenda other than speaking truth. A news media that speaks truth to power is a requirement for our democratic experiment.

We have been waiting for a reckoning, a decision by individual members of the media and their corporate bosses to make the hard choices. We have waited a while, and we believe we will be waiting a long time to come.

If we believe, which I believe most of us (“us” being Americans) do, that the Fourth Estate is vital to our nation, what comes next? I can’t speak for the media, I can’t speak for talk radio, I can only speak for myself (and somewhat for Glenn). What comes next for us is to continue down the road we have been — trying every day to do better and be better than we were the day before.

What follows is some of our thinking of the challenges within Conservative Media. I do not in any way mean to speak for it. I have been a consumer of Conservative Media for over 20 years, but an insider for less than three. I have vetted these ideas with colleagues, friends, Glenn and even “frenemies,” and they seem to hold some truth to these thoughts. But I look forward (in comments or otherwise) to learning from others in how to think differently and/or more clearly.

Conservative Media is a UNIQUE Industry:

Has there ever been an industry that has a Coca-Cola as the number one and an unbranded carbonated cola water as a number two? I can’t think of another. Certainly, not over a prolonged period of time. I do not believe there is one answer as to why. It is a confluence of factors. For purposes of the below, I ask you to define Conservative Media any way you want, within reason (CNN is not Conservative Media for an example as being outside reason). You can put TheBlaze at the outer rim or you can put anyone else at the outer rim — the issues described below are just as applicable. (Which, by just the sheer number of people who are center/center right in the country, is an unbelievable thing to behold.)

Lack of funding & “Liquidity Events”:

I can think of two significant media properties that have been purchased for multiple hundreds of millions of dollars in the last number of years: The Huffington Post and Business Insider. Similarly, BuzzFeed and Vice received massive investments from the mainstream media outlets. But there have been no acquisitions or significant investments in Conservative Media. We can argue about the why, but we cannot argue with the facts. A company should never (or at least rarely) start with an exit in mind, but what happens when there is no prospect of an exit, be it through an IPO or an acquisition?

What happens is that you cannot grow faster than your revenue allows. Why would anyone want to invest significant money (let alone why would responsible management want to raise significant money) when there is seemingly no prospect of liquidity in the future? Without equity investment, you cannot focus on building an audience and monetizing it later. You won’t see the Facebook or Amazon approach simply because we as an industry cannot afford it. Jeff Bezos is famous for thinking years out and not caring about quarterly or even yearly P&L —  I challenge him (or anyone else) to do that in Conservative Media.

Attracting and retaining talent:

(Author’s note: Considering this post is being shared on the day we have let go a lot of friends, I have included this section only because I deem it so important to the overall discourse. The choices we made does not change the overall challenges, though I readily recognize that it may appear tone deaf, and apologize in advance for that.)

Growing from five to 50 people is relatively easy. Of course, there are risks and challenges in getting the right people, but in terms of finding 45 additional people who share the heart and soul, and who see a future — that is doable. But 500 people? Harder. Now 500 people who all know there is no liquidity event on the horizon (either because they are smart enough to know this or because management does not lie to them) — really hard.

This also means that for people who we do attract they are either true believers — the good and the bad of that (you want fans, not sycophants) and/or need to be paid market rate in compensation because there is no pot of gold at the end of the rainbow. Cash plus equity is not a compelling proposition when Conservative Media does not have a liquidity event on the horizon.

But talent is not just about compensation — we all know that. It is also about a career path. A career path has multiple variables, from who you know, to what city you live in, to the credibility of your last role, etc. If someone starts at Conservative Media company X as a writer and they are writing “within the goalposts” of mainstream conservative content and popping out four to six stories a day and hitting their traffic goals and then some, what’s next? If they are at one of the few conservative media companies that is not considered monstrous (which I am gratified (?) that TheBlaze is not one of them) they can get a job elsewhere — we have many writers and on-air personalities who have moved on to bigger jobs at bigger companies. But at the same time, we could not keep them, because they hit their limit in terms of growth, in career or compensation. So, we actually function as a farm system — which is okay — but it is also a drain. In football parlance, we can never build through the draft because as soon as someone hits free agency, they’re eager to pursue their next opportunity.

Now for the companies that are considered monsters: where do their best and brightest go? How many can even find their next job? There are some, of course, but there is no farm system? Which just continues a cycle that I dig further into below; a spiral affect where a lot of blogs that don’t work together, have no ability to scale, each with its own voice and each in a race to get as many clicks and monetize their pages any which way they can.

(Author’s note: Friends on the left, you do not inspire conservative media to throw less red meat by ostracizing it).

Advertising is harder for Conservative Media:

I don’t know the number off the top of my head, but the percentage of Fortune 500 or even Fortune 1000 companies that advertise on Conservative Media vs. Media in general is very low. This matters even more so in digital than in traditional. In Digital media where every click or even eyeball (by way of heat maps) is monitored, the theoretical goal of a media site is to keep the user on the site for as long as possible/reasonable. Conservative Media is reliant, because of the paucity of media campaigns from big advertisers or big ad agencies, on direct response advertisers. Direct response (DR) makes sense for radio and we are incredibly grateful for our advertisers who have been with us from day one. But DR makes less sense when the goal is for the consumer to take an action, likely taking them off-site, while the goal for the media property is to keep the user on the site as long as possible.

You see the inherent conflict?

I wish the “other side” realized what they were doing when they lump all Conservative Media together? If you are on the left, ask yourself whether there is ANY publisher that you respect (even if you disagree with)? If so, how many? The problem are those who believe they are keeping Conservative Media ‘honest’, when they are only making the problem worse.

Think about it this way: As a publisher, if the punishment for bad behavior is that the same advertisers who won’t advertise with you, won’t advertise with you anymore; and the reward for bad behavior is that you generate more traffic and make more money, how do we think this ends?

Expanding on the point: If you consider that liquidity events are rare (or non-existent) and the significant challenge of attracting the highest paying advertisers, how will Conservative Media outlets make money? You don’t have to guess, look around….

A bunch of super smart people who work in small teams, who game the system to spend as little money as possible to make as much money as possible. I am NOT accusing Conservative Media of being the cause of clickbait by any stretch of the imagination. But if you see another way for Conservative Media to be successful other than playing the Facebook-Algorithm game, the clickbait game, the get-on-the-Drudge-home-page game, etc., then you truly do not understand how (digital) media works. Hence, every boycott, every time the “media” lumps everyone to the right of MSNBC as monsters, every time Conservative Media is all bad and “mainstream media” is all good, the outcome is predictable and it will continue to accelerate.

A final thought about advertising….

Conservative Media is reliant on direct response (CPA or CPC or CPM — no matter how it is ultimately billed for) and ad-networks. None of which are negatives in and of themselves. But the reality is that ad-networks — even the good ones — are not trying to make the experience of ads elegant for the user, they are trying to make the experience less terrible for the users. Direct Response, specifically on digital, sometimes actually have an incentive (depending on if they pay on a CPA, CPC, CPM) of making the worst and most obnoxious ad possible — basically through self-selection a user won’t click on it and the advertiser won’t have to pay OR the user will click on it and be more likely to go through with a conversion. I’m painting with a broad brush here and in giving extreme examples, but you can see how this plays out. Just look around the Conservative web if you need convincing.

The Lack of a Conservative Ecosystem:

We can all agree that there are too many echo chambers but let’s not confuse echo chambers with ecosystems. There is no Conservative Media ecosystem. Glenn literally met Mark Levin, Dennis Prager, and Ben Shapiro over the last ~2 years. We barely know each other let alone have an ecosystem. Yes, there is talk radio, and, of course, have a great relationship with Premiere/iHeart, and I assume the same is true for other hosts, but that is not an ecosystem, it’s one company.

(Author’s note: Read Brad Feld’s book on creating an ecosystem in your community and/or Start-up Nation and how Israel created an ecosystem.)

People talk about the ‘Paypal Mafia’ — the (mostly) original founders of Paypal — 5, all of whom have gone on to be worth at least a billion dollars and have founded companies such as Tesla (and all other things Elon Musk), LinkedIn, Palantair (all other things Peter Thiel), Youtube, Yelp, Yammer, etc… It is no accident that this one small group of people had an outsized influence. It is the basics of them creating their own ecosystem. An ecosystem of resources, talent, expertise, shared knowledge, shared marketing, shared success, etc.

Or look at any tech community and see that it takes a number of successful companies working together over many years to build a system where the next generation can walk on the shoulders of giants…..Conservative Media …. we have not done this yet.

Conservatives think we can do it all better ourselves:

Both because of the lack of ecosystem AND because we are all ‘rugged libertarians’, we on the right, believe we can do everything better ourselves. It is the same reason that there are 1000 charities that do the same thing; wealthy person X wants to do good, they want to make sure that it is done right, they will do it themselves. Conservatives who have made or found success, believe that they can do it better than the other guy. It doesn’t matter if they made their money in oil and the other guy is an expert in software development; they can’t partner, they need to own it.

Now frankly, I think this is tied to point number one (there are no liquidity events), at least in part; so if I am going to start something knowing that there is no exit, it may behoove me to retain 100% ownership and control. This is logical but I think it is only part of the answer.

I think there is more to the rugged individualism who sees the lack of ecosystem and looks around and says, “the pie is 100 ft., I can get 50 ft. of pie” vs. the entrepreneur who sees 100 ft. pie and says, together we can make that pie 10K ft., let’s get to work.

Beyond Conservative Media — Our Role going forward:

We fundamentally believe that we as a society need a functional media. We as a society need to have some trust in our institutions — even and especially while we seek to hold those same institutions accountable. But we as a society cannot effectively move forward if we share no facts and no narratives. As Yuval Harrari points out in Homo Deus, man has three core narratives; religion, currency, and nationhood. Without those shared narratives, which are being pulled at from every direction, society’s grip on humanity gets increasingly tenuous. Media has a role to play to keep us from unraveling, though they often seem to encourage and celebrate our unraveling… someone else long ago observed an unfortunate universal truth: if it bleeds it leads.

TheBlaze:

As I said earlier, at this time, TheBlaze is neither a success nor a failure in my eyes. It is a struggle that has and will continue to require hard decisions and going down an unknown road. But one of the benefits of radical transparency is that we have nothing to fear because we have nothing to hide. This is who we are, and our self-awareness informs the decisions we make. Whatever happens, good or bad, it will be deserved.

When you add up all the challenges that I list above, which are industry specific not company specific, for TheBlaze to be a successful business, it has a lot of work to do. It has to create great content, develop software, manage talent, sell advertising, deal with ad-blockers, move quicker to follow our users to mobile, open additional beach heads in social, etc. Anyone of those things is hard, doing all of them is, well, harder…..

In the next few weeks you will see the beginning of what we are trying to do at TheBlaze. And we’ll keep adjusting course and disrupting ourselves until we either get it right OR until we believe we can’t.

We believe that there is a path forward to find true success for TheBlaze and to help, in our way, Conservative Media answer the challenges it faces. But frankly, the world does not need just another “Conservative Media” company and we don’t need to spend another 5 years of our life proving it does. 

We are no more afraid of failure than we are of success, but we are terrified of being neither.

Glenn created "The Senate Fails to Condemn INFANTICIDE" in response to the Senate not passing Nebraska Senator Ben Sasses' bill banning infanticide early this year. In an effort to help support pro-life charities, Glenn first posted this for sale on eBay before being banned multiple times before we finally had enough and put it up for sale on bidpal.net.

At the time of this post, the bid was up to $4,700 — but we can do better than that. Please help us raise money for a good cause, you don't even have to display it anywhere in your home, you can just keep it in storage or something! If you want this priceless piece created by one of the most influential people in the world of art, place your bids here.

Can you remember the economic crisis of 2008 and how you felt when the news broke that Lehman Brothers had collapsed? I have found an economic threat that everyone needs to be aware of, so you can prepare yourself in case we see another 2008 type collapse. I am going to present the evidence to you and I urge you to verify everything and to form your own opinion.

What is that threat?

It is a bank called Deutsche Bank. They are by far the most dominant bank in Germany which is the world's fourth-largest economy. In 2018 they had €2.08 Trillion worth of assets and the second-placed bank (DZ Bank) had €506 Billion worth of assets. To show you how dominant this bank is, they have more assets than the 2nd, 3rd, 4th, 5th and 6th sized banks combined.
When we review a business there are three key parts to analysis:

  • Market sentiment
  • Business numbers
  • Technical Analysis

Market Sentiment

Deutsche Bank has a long history of potential scandals including going all the way back to World War 2 and dealing in Nazi gold. Below are five recent stories which have increased the negative sentiment around Deutsche Bank.

  1. In 2007, they purchased a portfolio of loans worth $7.8 billion and purchased insurance from Warren Buffets Company. It was discovered they did not set aside enough capital to cover any potential losses. Over the course of the ten years, they lost $1.6 billion, and when they sold the loan they did not update their financial statements to include the big loss
  2. The Panama Papers are an ongoing investigation looking for many things including offshore tax havens. These investigations have resulted in several heads of state resigning including in Iceland and Pakistan. Last November, 170 police raided 6 different offices in Frankfurt looking for evidence of money laundering.
  3. Estonia is a small country in Eastern Europe. It has a population of 1.3 million people and a GDP of €26 billion. In January, it was discovered Deutsche Bank got involved with a Danish bank called Danke Bank and processed over $230 billion worth of cross country payments (including from Soviet Russia) through one bank in Estonia.
  4. There have been rumors of issues with Deutsche for a while now and one of the solutions put forth was a merger with a bank called CommerzBank. The leaders of both companies met and they even got support from politicians. In April, news broke that the merger talks had failed because over worries the risks and costs would be too great.
  5. Last week in France, Investment banking boss Garth Ritchie and others were arrested in France over illicit tax transactions.

Business Numbers

Deutsche Bank is already struggling as they are losing staff, losing market share, and bonuses are expected to be down at least 10% and further rounds of cost-cutting to come. Now imagine the impact if business costs start going up.

The banking industry works in a very simple way. They raise funds through large bonds at low-interest rates and then sell those funds to business and individuals thru products like loans and credit cards at a higher interest rate which results in a potential profit.

Earlier this year, Deutsche Bank tried raising money through several bonds. They paid 180bp (basis points) on a two-year bond and 230bp on a seven-year bond. Let me put this in context for you. There is a small bank in Spain called Caixabank which paid 225bp on a five-year bond and one of the larger banks in Spain, BBVA paid 130bp on a five-year bond.

  • How and why is a small bank in Spain getting a better deal on bonds than a huge bank in Germany?
  • Why is a large bank in Spain getting a bond 100bp cheaper than a German bank?
  • What does the market know that we do not?

Stock Price

Deutsche is also missing revenue projections which further hurt the business ability to survive and prosper. As you can imagine all of this news has a deep and lasting impact on its stock price which is in deep trouble. Before I share the stock price, I need to put this into the context of the market and the industry compared to the big economic crash of 2008. Below you will see a chart of some banking stocks from around the world with their peak price prior to the 2008 crash, the low of the 2008 recession and the price today:

As you can see from the above chart the banks in America have recovered from the 2008 recession by anywhere up 375% and JP Morgan has not only recovered its price in full but is constantly setting new high's. Ireland went bankrupt and had to be bailed out by the EU/IMF following the 2008 crash and even our national bank has more than doubled its price since 2008. The worst performing bank I could find was Societe Generale which has issues but is still hovering around its 2008 low price levels.

Now let's put that into the context of Deutsche Bank. Not only has the stock not rebounded but it is over 65% below its 2008 low at $6.75.

Technical Analysis

When you are dealing with the stock market, you also have people who study pricing through technical analysis. Experts look at things like FIB sequences, trend lines, and support levels. Support levels are a key metric for a stock failing because are looking to find where it will find support and potentially bounce higher.

We are very close to a key support level ($6.40) and if the price goes below this level, there is no saying exactly how low the price could go. At least one company expects Deutsche to fall below this support level, as several weeks ago UBS downgraded the stock to a sell order. This news was compounded last Friday when rating agency Fitch, downgraded their credit rating to BBB or two levels above JUNK status.

Other Information

I know you are likely reading this and thinking "this bank must have smart people in charge and surely they have a plan, right?" I am sure there is a plan and while they have kept their cards close to their chest, they have spoken in the past about the areas they foresee having growth for the company – they include business in Saudi Arabia, UAE, and Egypt. Do they strike you as countries which are stable and will offer steady and reliable growth? Do you have to think really hard to imagine how this could go potentially very wrong?

Questions

I believe there is at least a solid case Deutsche is in a LOT of trouble. So what are possible scenarios for the future? I will lay out the key questions below but I must stress that it's impossible to say for sure what exactly will happen. One of the key numbers to remember here is they have roughly €50 billion worth of derivatives.

  • How likely is it that the bank can turn things around and survive?
  • How likely is it the bank continues to run into trouble, its stock price fails and eventually fails?
  • If you think it is likely it will fail, the question becomes what will the fallout be? Who will be affected?
  • Will they be bailed out?
  • If so, by whom? The German government, ECB, IMF, the Federal Reserve?
  • What will the German government think? Some members recently spoke out saying they would block public money for the proposed merger? Will they block funds if it failed?
  • Will other banks be exposed and affected? Will they have to take losses?
  • Will those losses be spread around or will one or more bank be mainly affect?
  • Will this affect the sentiment of the banking sector and cause a panic?
  • If there are issues and it starts affecting the stock prices, what will be the impact on other industries?

Last Question

The last question revolves solely around the banks and the regulators? How secure are the other banks? We all hear about how banks are now put through "stress tests" but how much trust do you put in those results? How much trust do you have in the regulators?

I know this may make me sound like a conspiracy theorist to some but it's an honest question. The Fed is on public record saying they want to keep this economy strong as long as possible. If a bank did not perform strongly in a stress test or even barely failed one, do you think they would report it?

Can you imagine the pressure that body would come under to stay silent? Can you imagine the rhetoric they would face with questions like, "Are you really going to fail one bank? Do you know how many people will lose their jobs if you do that?" Am I saying this is happening? No, but can you really rule it out 100% as a possibility?

I urge you to ponder on these questions, do your own research and find YOUR answers.

Update: The most freaquently asked question I have received from this column / show is how much time do we have to prepare. This is an impossible question to answer, as it could fail tomorrow, next week or might be next year. However I want to provide you a potential date for your diary – July 24th. That is when Deutsche will release their next earnings report and if it comes in below expectations, it could cause a further drop in price casting more doubt over the future viability of the bank.

Please support Jonathon's weekly podcast which is exclusive to the Blaze Media and available for FREE. He offers a unique perspective by promoting America's Founding Principles and brings every issue back to a set of core principles which are always based around the laws of nature. You can find links to his show by clicking here or by searching for Freedoms Disciple on your favorite audio platform.

Survey: Where do you stand on these conspiracy theories?

Thought Catalog / Unsplash

Have you seen this survey on the most-believed conspiracy theories in America?

It's no surprise the survey has been getting so much attention. The results are actually a pretty disturbing.

Infographic: Belief in Conspiracy Theories in the United States | Statista

I decided to put together a quick survey of my own, with slightly different wording.

Up-vote the ones you agree with and down-vote the ones you disagree with.

I believe Lee Harvey Oswald killed JFK alone. However, I would not be surprised to find out the government sealed evidence that others were involved.

If by "deep state" you mean long-time Washington power brokers who are used to calling the shots and now feel threatened by Donald Trump not listening to their advice or council — yes, I do believe that many people like that are working against him and his administration.

Whether alien bodies are in Area 51 or not, I do believe the government knows more about UFOs than they have told us.

I do not believe the U.S. government was involved in 9/11, but as we know, NSA advisor Sandy Berger was caught destroying documents from the national archives related to both Bush and Clinton. All U.S. administrations have been to close to the Saudis, and the Saudis were involved in 9/11 at some level.

I believe the climate is always changing — it's natural. I would be willing to accept that man MAY play a role in this. But I do not believe in the solutions currently being discussed, nor do I believe the intention of most political activists are pure.

Any talk of the Illuminati provides the true dangers to man's freedom — like very powerful NGOS and men like George Soros — a perfect cover.

The U.S. government has done some horrible experiments on people and land — I also suspect they will do more things in the future. But I do not believe in the systematic spraying of chemicals using chemtrails.

The moon landing was real, but I see a time coming when people will not be able to trust their eyes due to deep fakes.

What do you think?

Let me know in the comments section below.