The Daily Mail said in a financial filing that the Facebook-fueled publisher Elite Daily, which it purchased in January 2015, is now worthless, according to the website Recode.
The Daily Mail and General Trust stated in its Preliminary Full Year Results announcement posted Wednesday that while revenue grew for the Elite Daily, up 44 percent in the last year to $12.6 million, other challenges led to it writing off $31 million in losses, according to Recode.
The company said in its Preliminary Full Year Results that Elite Daily's "audience retention and revenue growth have been disappointing and losses have exceeded expectations. The carrying value of the business's goodwill and intangible assets in DMGT's balance sheet has been written down completely, resulting in an impairment charge of ($31 million)."
The Daily Mail and General Trust went on the say in the announcement that "Elite Daily, 7 Days and other businesses incurred ($10.1 million) of losses, an increase compared to ($2.5 million) in the prior year, reflecting increased investment in Elite Daily."
The falling out is a far cry from when the Elite Daily founders celebrated teaming up with the Daily Mail after the purchase nearly two years ago. Recode noted Elite Daily's popularity grew on Facebook before the sale.
"This does not represent an end to our journey, but the continuation of our growth as a company to the stature we've always dreamed it would reach," wrote David Arabov at Elite Daily on Jan. 30, 2015, the platform he founded with Jonathon Francis and Gerard Adams.
"Our acquisition by Daily Mail has provided us the perfect opportunity to do just that. Our mission — to provide the best content for Millennials at an even greater scale — has not changed, and will only be bolstered by a renewed sense of vigor," the statement continued.
Recode reported the Daily Mail and General Trust paid $26 million, or 17.6 million pounds, for the Elite Daily even though reports at the time put the sales price at $40 million to $50 million. The website said retention bonuses or other payouts that may not have been reflected in the financial statement could account for the difference.
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