Dear Contributors to OUT and other Pride Media titles,
As the world’s largest publisher of LGBTQ stories, we at Pride Media believe unequivocally that creators must be remunerated for their work. Writers, photographers, makeup artists, stylists, copy editors — everyone deserves to be paid for services rendered.
A number of you signed an open letter last week expressing “anger and dismay” over nonpayment. We share in your outrage and have prioritized the resolution of this issue.
We are happy to report that the majority of individuals seeking compensation from Pride Media have already received payment. Additionally, we are in the process of issuing payments to the remaining individuals with outstanding invoices, which we will explain more in detail below. Please be assured that we are working to secure compensation for your work as quickly as possible.
To our contributors, we apologize. The nonpayment of freelancers — particularly those whom we’ve relied on to help tell the stories we are most proud of — is unacceptable. You all deserve payment and an explanation.
To this end, we’ve written this letter to provide a timeline of events that led to this unfortunate situation, with all supporting documents included as evidence. We hope this document can shed light to what has unfolded during your time with us, and signal to each of you that we are determined to resolve all of this as a community.
I. Grand Editorial and McCarthy
To understand the root of the issues with freelancer payments, it is important to know the recent history of Pride Media, as well as the companies it paid to produce editorial content: Grand Editorial and McCarthy LLC.
Aaron Hicklin founded Grand Editorial, a content and editorial agency, in 2012. In addition to other services, Grand Editorial produced OUT Magazine and also operated Out.com as contracted services for Here Media, the precursor to Pride Media. This relationship continued when Pride Media was founded in 2017 and took over OUT and its sibling publications.
That same year, Aaron sold his company to an entity called McCarthy LLC, which is run by Evanly Schindler (formerly known as Evan Schindler). McCarthy also operates BlackBook, an arts and culture publication.
Grand Editorial, and then McCarthy, created the print OUT Magazine product until the December 2018 / January 2019 double issue. During the summer of 2018, Pride Media first received reports that McCarthy had engaged–but not paid — content creators to help produce OUT Magazine.
I, Nathan Coyle, became CEO of Pride Media in mid 2018. After learning of these very troubling reports, I chose to terminate Pride Media’s relationship with McCarthy.
The contract between Pride Media and McCarthy (which was assigned to McCarthy by Grand Editorial when Aaron Hicklin sold his company to McCarthy in 2017) contemplated a 90-day notice to terminate. In other words, Pride Media needed to give McCarthy 90 days’ notice that it was ending this business relationship.
On August 16, Pride Media notified McCarthy both by phone and by email that it was giving McCarthy said notice. This meant that by November 15, the relationship between Pride Media and McCarthy would be over.
During the public confusion over these events, Schindler disputed the amount of money paid to McCarthy by Pride Media. So, we’re publishing bank records here to prove that, from January to August 31, 2018, Pride Media paid McCarthy and Grand Editorial $804,075 to be used to compensate contributors.
The vast majority of these funds were sent to McCarthy, not Grand. (Note: Pride Media changed banks in January 2018, hence the transactions in January are from a different bank. Also note that until very recently, the legal name of the company was “Pride Publishing,” which is why you see that listed as such on the bank statements below.)
Essentially, Pride Media was paying McCarthy over $90,000 per month to produce OUT Magazine. However, Evanly Schindler said the magazine only cost $20,000 per issue to produce in a recent interview with WWD — which, if true, does not account for the remaining $70,000 per month he received from our company. We find this disparity truly shocking and deplorable, particularly as so many individuals who were contracted by McCarthy (many of you among them) remain unpaid.
As you might imagine, $800,000 represents a large sum of money for Pride Media. In fact, it is a significant portion of our operating budget. You now see exactly how much money McCarthy was receiving — and how much McCarthy was withholding for themselves and not using to pay contributors.
One of the many excuses Evanly Schindler used to explain why he wasn’t paying contributors was that Pride Media was late making its payments to McCarthy. As you see above, Pride Media was paying McCarthy $42,225 on a regular basis. The exception was only twice — in June, when Pride was 6 days late in its payments, and then again in July. (Why? Every July, Pride Media has to pay for its many events produced during June — i.e. Pride month — but the company does not receive payments until later in the year.)
However, in the grand scheme, these two late payments are inconsequential. McCarthy had been taking $70,000 in profits every month, and had enough in its cash reserves that a payment from Pride Media made a few days late would not justify McCarthy’s failure to pay its freelancers.
II. Terminating the Contract with McCarthy (September — November)
By August 2018, it was becoming increasingly clear that McCarthy was not paying contributors. Therefore, Pride Media informed McCarthy that, starting in September, it would take over the responsibility of paying contributors directly for the remainder of the term of the business relationship (through mid-November).
Pride Media worked to establish an agreement with McCarthy on the “wind down” period of the relationship from September 1 to November 15, 2018 — the period during which Pride Media informed McCarthy that the company would start paying freelancers directly for the remainder of the business relationship (as we were still technically under the agreement). After a great deal of back-and-forth, we agreed that McCarthy would be paid a fee of around 18% of the remaining $90k monthly payments, and the rest would be given directly to the people working on the print publication during this period.
During the course of these negotiations in September and October, Pride Media learned of more and more contributors who were engaged by McCarthy to produce OUT prior to August 31, 2018 who were still unpaid. Pride Media insisted that we deduct those unpaid invoices from Schindler’s “fee” — which of course, quickly reduced any fee to zero. Evanly didn’t agree to these terms, so ultimately, this amendment was never executed.
During the “wind down” period, Pride Media would have been obligated to pay McCarthy six additional payments of about $45,225 each (twice monthly). However, we made the decision to stop these payments once we received the reports that freelancers were not being paid. This is why Evanly Schindler has inaccurately claimed that Pride owes him $270,000.
Schindler’s claims are misleading at best. We felt it imperative to revise our agreement with McCarthy in order to make sure the individuals working on OUT were compensated for their work. This process began in September 2018, when Pride Media started directly paying individuals working on the OUT publication on a twice-monthly basis for their services rendered towards producing the November and December/January issues of OUT. (We have redacted the amounts paid to individuals as that is information we do not wish to share.) The total amount of these direct payments to freelancers was $124,630.78.
In addition to these staff members producing the publication, there were other vendors who provided services for the OUT print magazine during this period. This payments for vendors totaled $50,737.20. The total for both the regular day-to-day individuals and these other contributors came to $175,367.98. (Note that this does not include other individuals who rendered services during this time, which we will address later in this letter.)
After informing Evanly Schindler that we were terminating the relationship with McCarthy, we made only one more payment of the $45,225 twice-monthly payments that we paid McCarthy. During the 90-day “wind down” (after notification of terminating the agreement) we would have paid McCarthy a total of six payments — in other words, five additional payments after August 31 — if we had not made the decision to change the way that the money flows (so that we knew that people were actually getting paid). This means that McCarthy would have been paid an additional $226,125. Since the costs to produce the November and December issues were around $205k during the “wind down” period, the actual amount “owed” to McCarthy is about $20k.
Given the reality of this situation, we do not consider this payment necessary. What about the over $100,000 in unpaid invoices that McCarthy never paid to individuals? Where did that money go?
Certainly not to the people who deserve it.
III. The Path Forward
In addition to the individuals working on a daily basis, there were a handful of other people working on OUT (and in some cases, other Pride properties) that were contracted directly by Pride Media. In full disclosure, Pride Media regrettably fell behind on these payments. This was for a few reasons: First, the very small Pride Media accounting team had never dealt with processing individual invoices at this magnitude. (In the past, the team was merely paying McCarthy the $45,225 amount twice per month — not paying all of these individuals.). What’s more, the finance team was without leadership, as the head of the department retired in June, and the company didn’t find a replacement until December.
Additionally, there were individuals who had been contracted by McCarthy who were contacting Pride Media directly for payment. (Evanly Schindler instructed his assistant to direct everyone to pursue us for their payment, despite the fact that McCarthy received over $800,000 in 2018 from Pride Media to pay all of these people.) So, it was difficult to identify who had been hired by whom. In other words, the divorce from McCarthy caused a great deal of confusion within the accounting department during the fourth quarter of 2018.
For this delay in transparency and in payments remitted, we are sorry. Under the leadership of our new CFO, Janelle Mitchell, we have begun correcting this situation, and I am pleased to announce that we have made progress. As of last week, Pride sent checks to the majority of individuals who had been hired by us but not received payment.
Moving forward, our editors will be working with our finance team to create a more responsive and transparent system.
Ultimately, the most important objective is that anyone who contributed to OUT gets paid in a timely fashion. The majority of individuals who were engaged directly by Pride Media during the transitional period have already been paid. Our goal is to send payment to all of the remaining individuals who were engaged directly by Pride Media during the transitional period by the end of February 2019.
We understand that freelancers often find themselves in positions where they are frequently taken advantage of or never paid. We are deeply sorry for all of you who feel that you have been mistreated. We hope to work with each one of you to reconcile all issues that have arisen during this time.
Unfortunately, those hired by McCarthy will not be paid by Pride Media, as our company has already given over $800,000 to McCarthy in 2018 for this purpose.
However, please know that we share your commitment to seeking compensation. We are working on identifying solutions to bring this chapter to a close, plans of which are still forthcoming.
CEO, Pride Media