Vox has 36 paragraphs on why Snap is a great investment–and none of them had room to acknowledge that Vox‘s main investor just put half a billion dollars into the company.
In December (12/21/16), FAIR noticed a bizarre set of articles at Vox Media praising the photo app Snapchat in unusually infomercial-esque tones:
- “Snapchat’s $25 Billion Initial Public Offering, Explained for People Over 30” (Vox, 10/6/16)
- “The Marketing Genius Behind Snap’s New Spectacles: We All Want a Pair” (Recode,11/20/16)
- “The Snapchat Spectacles Craze, Explained” (Vox, 12/14/16)
- “You Can Get Prescription Lenses for Your Spectacles for as Little as $29” (Recode, 12/14/16)
Missing from these posts was any disclosure that Vox and Snapchat’s parent company, Snap, Inc., share a major investor, the private equity firm General Atlantic. This was dodgy enough as it stood, but Vox’s disclosure problem has just gotten much worse.
On March 3, Comcast—Vox’s primary investor, responsible for roughly two-thirds of its entire cash intake—invested a half a billion dollars in Snap, Inc. the day after its much-publicized initial public offering. Right on cue, Vox’s resident libertarian writer Timothy Lee (FAIR.org, 12/7/16) took to Vox’s “New Money” vertical to explain why Snap, Inc. was totally worth its massive $33 billion valuation:
- CNBC, 9:36 AM, 3/3/17: “Exclusive: NBC Invested $500 Million in Snapchat IPO as Part of Its Ambitious Investment in Digital Media”
- Vox, 3:00 PM, 3/3/17: “The Case That Snap Really Is Worth $33 Billion”
Here a company, effectively a Comcast subsidiary, writes a glowing explainer on why Comcast’s $500 million investment is solid and has huge upside, on the same day as the investment.
The piece is an almost uniformly positive repackaging of Snap, Inc.’s S-1 filings, with marketing-type spin on the company’s outlook:
That might seem like a crazy valuation for a company that has never turned a profit and lost $515 million in 2016. But there’s actually good reason to be bullish about Snap’s future….
It’s misleading to compare Snap to social media companies, because it isn’t one, really. Instead, you should think of Snap as a pioneer in treating smartphone images, video and interactive content as a new medium in its own right….
With a young audience open to experimentation and coveted by advertisers, Snap is ideally positioned to develop this medium and then sell ads on it. And that creates the potential for Snap to become a lot more financially successful than Twitter has been….
The big question for Snap, then, is not whether it can make a profit. It’s how big it can get before growth stalls out. And there are three reasons to think Snap could do better than Twitter on this score…
Nowhere in the piece does Vox disclose that, a few hours prior, their parent corporation had invested $500 million in the company in question.
It’s not as if Vox Media is unaware that when writing about Comcast and NBCUniversal, it should disclose it is largely owned by them. A reprinting of an NBCUniversal press release by Vox Media’s Recode (3/3/17) the same day included the fact in its lede:
For instance, NBCUniversal has put $400 million into BuzzFeed and $200 million in Vox Media, which owns this site.
It appears the standard for disclosure—such as there is—is whether Vox Media is writing explicitly about Vox Media, not when it’s writing about the corporations that own most of Vox Media. Though this standard seems to shift as well: After getting pushback in 2015 for writing a fawning defense of Comcast with no disclosure (FAIR.org, 9/9/15), Vox did ultimately add one.
When asked in December 2016 what its disclosure policy was, Vox managing editor Lauren Williams told FAIR, “That’s something we’ve been thinking about, and we plan to post one in the new year.”
A follow-up email Saturday asking if that disclosure policy had been drafted yet has not been answered as of publication. If it is, we will update accordingly.
Vox Media and its parent NBCUniversal have been bullish about Snapchat for some time. NBCpartnered with the company to distribute media in August 2016, Vox has featured glossy explainer videos on its technology, and Vox MediausesSnapchat’s Discover platform. Was this in anticipation of a major post-IPO investment? Was it because it shares a major investor in General Atlantic? It’s unclear.
What is clear is that Vox Media should disclose glaring conflicts of interest, like hyping a company its parent corporation just invested a half billion dollars in a few hours earlier.
Adam Johnson is a contributing analyst for FAIR.org. You can find him on Twitter at @AdamJohnsonNYC.