Dev Pragad doesn’t want to talk about the dark times before. It’s quite understandable. Like most turnaround chief executives, he wants to talk about the good times, the revival of his business and its
There’s plenty to say about that. Pragad has spent the past five years leading a remarkable transformation at Newsweek, turning a brand that had become synonymous with scandal and the sorry decline of traditional media into a rare success story.
In 2020, Newsweek’s website hit 100 million unique monthly readers, up from seven million at the start of 2017. In 2021, its revenues doubled to $60m. Profits have been growing healthily since 2018, and the company is without debt for the first time in decades.
If Newsweek’s historic arch-rival Time did a media version of its Person of the Year, Pragad would make a great cover. He’s been fêted by the UK government as a British business leader achieving success in the US and recognised by his alma mater King’s College London as an honorary fellow. His transformation of Newsweek was recently the subject of a Harvard Business School case study and he’s still only 37 years old. Of course he wants to talk about it.
Yet there’s more to his reluctance to discuss the years before he became CEO of Newsweek in 2016. Unlike most turnaround leaders, Pragad was there when the business was falling off a cliff.
A US cultural fixture
Newsweek had been a fixture of American cultural life since 1933, when it was founded by Brit Thomas Martyn as an essential complement to the daily newspaper, a place to “explain, expound and clarify” the biggest issues of the times. At its peak in the 1990s, its US circulation reached more than 60 million, nearly a quarter of the population.
Then the internet happened. The media was arguably the first great casualty of digital disruption, and it hit Newsweek particularly hard. How could a weekly news magazine compete with a world of information that was both free and instantaneous? Circulation collapsed, losses mounted and debt spiralled. In 2010, the magazine’s long-time owner The Washington Post sold it for $1, and most people assumed they wouldn’t see it again, except perhaps in a museum of 20th-century life.
Resurrection came in a strange shape. After a few years in bed with the Daily Beast, during which the print magazine ceased publication and the website languished, it was sold again in 2013 to the International Business Times.
IBT was a strange outfit, founded by virgin entrepreneurs Etienne Uzac and Johnathan Davis with the backing of their controversial pastor, David Jang, and intimately connected to Jang’s Christian university, Olivet. Essentially a news aggregator in the Buzzfeed mould, it promised to create a new digital voice in media, and had early success thanks to an aggressive approach to search engine optimisation.
Pragad comes in here. A practising Christian, he knew Uzac and Davis distantly from his student days. Indian-born Pragad, who lived in the Middle East from the ages of 10-17, came to the UK to study computer systems and electronics engineering at university; Uzac and Davis were also studying in London at the time. After completing his PhD in 2009, he had no intention of becoming a media mogul, but was at a crossroads in his life and accepted their offer to start IBT’s UK franchise. Headcount and revenues grew steadily under his direction in the years before IBT acquired Newsweek in 2013.
Over in the US, Uzac’s apparent early successes with IBT, which had been renamed Newsweek Media Group post-acquisition, were beginning to unravel.
As a team of star writers tried to restore Newsweek’s relaunched yet still loss-making print outfit to former glories, the website acquired a reputation for boiler room clickbait.
Behind the veil, things were just as bad. Overspending and underearning, the group was falling further and further into debt, despite being subsidised by Newsweek International, the UK/EMEA arm that Pragad owned and had run independently in London since 2014, but which was nonetheless dependent on the US newsroom for its content and reputation.
In 2016 that reputation took a public hit after Uzac sacked dozens of journalists en masse following a drop in IBT’s revenues. A few months later, following a federal lien over a missed tax bill, the company’s creditors had enough and asked Pragad and a new executive team to take over in New York, with Uzac – still co-owner of the US business with Davis at this point – as chair.
“We inherited a total mess. Lack of management skills, mismanagement, incompetence, you name it,” Pragad recalls. “I remember walking into my first meeting with the editorial team. I’ve never seen such shell-shocked people in my life. I sat down and just spent some time talking with them, saying that we were going to work very hard to turn this around. Let’s be honest, in the beginning no-one believed it. It was a lot of hard work.”
The challenge of solving these legacy problems was compounded not only by the continued presence of the owner, but also by the urgent need to begin a digital transformation of an obsolescent business model.
The first phase in this transformation was to pivot from a print-first to a digital-first strategy. Print runs – and therefore costs – were reduced, and editorial resources directed primarily to create stories for online consumption and distribution. Clicks were still very much the order of the day, but Pragad is unrepentant about the need for a mass-market media brand to maximise views. Newsweek’s survival, he explains, depended on becoming profitable quickly, and that meant hitting much larger advertising revenues.
“You had people who were paid X and producing Y, and Y was substantially less than X. How can you run a business like that? We had to accept market reality. In every other industry that’s the norm, so why not in media?” Pragad says.
The key was to convince writers that there was no such thing as a great story that no-one reads, and to encourage them to embrace data in their editorial decisions, learning which stories found an audience on the major digital platforms like Google, Facebook and Apple News, and which did not.
This was a difficult sell. For example, the leadership team developed a writer impact analysis, which placed journalists on a graph with their number of monthly stories on one axis and views on another, to focus minds on output; the newsroom soon christened it the “quadrant of death”, not exactly a sign of enthusiasm. Pragad acknowledges that certain morale-sapping “quality control issues” also emerged from the continued pursuit of views, most notably a story in 2017 that erroneously – and bizarrely – claimed the wife of the Las Vegas hotel shooter Stephen Paddock was a polygamist.
Nonetheless, the business strategy was starting to work. Unique monthly viewers had increased from seven million in February 2017 to 38 million by the end of that year, lifting ad revenues with them. Yet, unbeknownst to Pragad, Newsweek’s low point was still to come.
Reputation in ruins
On 18 January 2018, the Manhattan District Attorney’s office raided Newsweek’s building in New York, ostensibly over inappropriate financial relations with the Christian university Olivet. Uzac and his wife Marion Kim, the company’s chief financial officer, resigned.
Months later, it was revealed that Uzac had been covering the group’s considerable debts by lying about its accounts – even going so far as to create a fake accountancy to do its audit, borrowing $10m under false pretexts.
Its reputation in ruins, Newsweek was split from IBT in mid-2018. Pragad assumed a majority ownership stake in Newsweek – with Davis, who was not involved in any impropriety, as a silent partner – thereby ending his association with IBT and Uzac, who later pleaded guilty to fraud and money laundering.
The trauma of this time is still evident in Pragad, who was blindsided by Uzac’s actions. He pauses for some time. “Early 2018 was a real challenge. When you’ve started to create momentum and then the past mismanagement of the owners comes back to bite you like that, it’s really demotivating,” he says.
“People don’t see the emotional and psychological toll on leaders. I feel like it’s taken such a psychological toll on me in the last five years.”
Pragad says the experience taught him a lesson about being grounded in your values, and communicating those values relentlessly to the people you work with: “In hindsight I wish I’d been able to draw the line even more publicly between the old management and the new management, between the old ways of doing things and the new ways. Being grounded in your values gives a lot of confidence in what you’re doing and why it is so different from what happened before.”
The final separation from Uzac gave Pragad the ability to draw that line, once and for all, even if the circumstances were far from ideal. Morale was understandably low, not least after Uzac, in a parting blow, sacked the editors and writers who reported the saga in Newsweek itself, something Pragad says he did not condone. Another high-profile editor later resigned in protest at their treatment, writing a public letter to Pragad, which read: “This coup d’grace comes at the end of a string of scandals and missteps during your tenure.” Yet a renewed focus on Newsweek’s values – with a lot of communication – began the healing process.
Pragad looked back to Newsweek’s history to articulate these values and refine its mission. Newsweek would still “explain, expound and clarify” as its founder had intended. Rather than trying to appeal to the centre of politics as it had done, however, it would now aim to speak to and listen to readers across the political spectrum, welcoming diverse views in a spirit of rigorous, respectful and honest debate.
The appointment of former Newsweek veteran Nancy Cooper as the new global editor-in-chief was a key decision. She helped to define editorial principles and affirm that article quality was no longer to be seen as an inconvenience in the pursuit of web traffic. Instead, the emphasis would be on “impact”, which meant stories had to be both widely read and valuable once read.
At this stage, impact meant original, relevant, timely, well-sourced reporting guided by data about what readers wanted. As Cooper wrote in an email to the editorial team in 2019: “It’s pretty basic. We are a news publisher operating in an extremely competitive environment. We don’t want fewer stories or slower stories, just to make every story we do better.”
Web traffic continued to grow, but so did the reliability and quality of the reporting. Pragad proudly points to an open database of story corrections that Cooper established: “When she took over, there were a lot of corrections; today, there are hardly any.”
Away from the newsroom, Newsweek’s digital transformation also began to pick up in fairly dramatic fashion, thanks to a series of lucrative commercial partnerships.
The first was in 2019, with Engine Media Group. Founded by Tom Rogers, who previously set up CNBC and MSNBC, Engine provided sophisticated programmatic advertising capabilities without Newsweek having to spend millions on scaling its own team and technologies. Pragad says the deal accelerated growth while reducing risk, adding that it will have been worth more than $100m in additional revenues over its first three years.
The second was with Google Cloud, which worked with Newsweek to develop an industry-leading AI recommendation engine, serving readers personalised stories that were more likely to result in further engagement. Newsweek’s click-through rates increased by 50-75% between early 2020 and August 2021 as a result, with revenue per visit increasing by a factor of 10.
A studious approach
Pragad has something of the eternal student to him, which makes him an engaging conversationalist. His eyes light up when he talks about things he’s learned or people he’s learned from, and this happens a lot. For example, he credits his ability to get through the crisis years at Newsweek in part to the work of Stanford neuroscientist Professor Andrew Huberman, who suggested that controlling your breathing during cold showers is a good way of practising staying calm under intense pressure.
“If you’re able to remain calm, you can always see the path forward. Because when the chaos hits you, there’s always still a clear path – it’s just that the chaos distracts you from seeing it,” Pragad explains. Incidentally, he says somewhat wryly, he did take daily cold showers for a period of two years in New York after hearing Huberman’s ideas, even in winter.
When discussing the challenges of running a business in the limelight, he points with admiration to the self-belief of Stéphane Bancel, CEO of Moderna, and with sympathy to the toughness of Princess Cruises CEO Jan Swartz, whose stranded ship the Diamond Princess attracted a great deal of unwanted attention during the first wave of the Covid pandemic.
He can also talk for hours about the finer points of the technology underpinning the mobile internet – the subject of his PhD – and still has lunch with his old supervisor when he’s in London.
In his life before entering the media industry, Pragad was a voracious consumer of education, waking up at 3am to study before school, later requesting to do a master’s level thesis in place of an undergraduate thesis because it was too easy. It wasn’t too surprising, therefore, that he went back to study in his later professional life, starting the Owner/President Management Programme at Harvard Business School in 2020.
It was at Harvard that he encountered the idea of kaizen, the influential theory of continual improvement that famously transformed Toyota into the world’s biggest car company. “For me that was a mind-blowing concept. Even on a personal level, as human beings, you continuously want to improve, to become a better person tomorrow than you are today, to do things better than you’re able to do today,” says Pragad, who introduced the idea to Newsweek.
Do lean manufacturing principles really apply to news? Absolutely, Pragad insists. It comes back to using data to improve impact and efficiency. “If you’re able to take your staff on a journey of continuous improvement, and you’re able to provide all the tools and skills needed to succeed, why would they not be on board for the journey?”
It’s an approach that doesn’t work for everyone, and he admits some have left, but Pragad says that being clear and unapologetic about your values simultaneously helps to attract people who will thrive in the environment you’re trying to create.
Another very important idea encountered at Harvard was Objectives and Key Results (OKRs), the stretch goal management system that originated with Intel’s Andy Grove, and which remains popular in Silicon Valley.
“I came to realise the power of big, ambitious numbers, because research has shown time and time again that teams and companies that set big ambitious goals always outperform those that do not,” Pragad explains.
With the help of the Google Cloud team, he led Newsweek’s pilot OKR in Q4 2020, with the goal of increasing advertising revenue 55% over the year before. “That was a huge stretch goal, in a pandemic year. But we actually exceeded it slightly. By definition you’re not supposed to meet a stretch goal. That’s when we realised we had been massively underestimating ourselves.”
Pragad credits OKRs with creating a change in mindset, making clear that business as usual was not an option. He says the framework has unleashed the creativity to take the business to the next stage of growth, breaking down silos between teams. Because objectives are both transparent and mutually dependent, the overall goals will only be met if everyone participates, which has surfaced numerous opportunities to improve performance.
The process has been rolled out across commercial, operations and editorial – where in the latest step towards data-led journalism, the team has created a simple scoring tool to quantify the impact of a story based on things like other news outlets picking it up, or governments taking decisions as a direct response to it (breaking Watergate would score highly; cat videos would not). The framework has been so successful that he now plans to apply OKRs to everything the business does, including “back office” functions like HR.
A brighter future?
Newsweek broke even in 2019, and has been debt free since 2021, when it doubled its revenues. The company is investing in its journalism and its technology, and Pragad has set yet another ambitious target, to double again in 2022, which would make it a $120m business.
In terms of securing the company’s future, Pragad is cooling on his original idea of pivoting from an advertising to a subscriptions revenue model, simply because of the speed with which the ad side is growing, but he does see opportunities in ecommerce partnerships and in leveraging AI across the business.
However you look at it, Newsweek is now a brand on the up again. Even its many critics, among them quite a few former Newsweek journalists, have been quieter of late.
The Harvard case study of Pragad’s time as CEO makes it look easy – but it wasn’t, and he remains conscious of the cost of leadership to wellbeing. Nonetheless, for all the difficulty, he describes the events of the past few years as among the best experiences of his life. And, finally out of crisis mode, he’s hungry to go further.
“Newsweek still has such a long way to go. We still need two or three years of immensely hardy work to double, triple, quadruple the business and be incredibly influential. The only limitation is our ambition.”