Barry Diller Bets on Media Veterans to Turn Around The Daily Beast

The Daily Beast has long been an outlier in the digital empire of the billionaire Barry Diller. As sites like Match.com and Expedia made millions over the years, Mr. Diller’s digital tabloid lost money, publishing scoop after scoop but struggling to turn a profit.

Now, Mr. Diller is making a major push to change that, and he’s brought in Ben Sherwood, the former president of Disney ABC Television Group, and Joanna Coles, the former chief content officer of Hearst Magazines, to help.

Mr. Sherwood and Ms. Coles will be granted an equity stake equivalent to roughly half of The Daily Beast, with IAC keeping the majority, according to a person familiar with the matter. That will allow them to participate in the financial success of the website if they can grow its business. They will each be paid salaries. Mr. Sherwood, 60, will be its chief executive and publisher, and Ms. Coles, 61, will be chief creative and content officer.

IAC declined to provide detail on the specific financial terms.

The decision to bring in Mr. Sherwood and Ms. Coles came after Mr. Diller considered a sale of The Daily Beast and had conversations with various suitors. One potential deal with Janice Min, the founder of the Hollywood newsletter company Ankler Media and the former top editor of The Hollywood Reporter, didn’t work out.

“When Ben and Joanna made this presentation, I’d really gotten to the point where I was kind of skeptical that anything would work out, other than selling it,” Mr. Diller said. “But I was so impressed with their concept, their energy and their interest.”

Mr. Sherwood said that the plan for revitalizing The Daily Beast would take inspiration from other publications that have achieved profitability through a mix of subscriptions, advertising and events. After building and selling another business, a youth sports company called Mojo, Mr. Sherwood — who also headed ABC News — said he found himself gravitating back to journalism, where he felt he could make the greatest contributions.

“The first and most important piece is to get in there, to assess, to observe and then to begin to influence how we make great stuff and how we make people feel that The Daily Beast is a guilty necessity every single day,” Mr. Sherwood said.

Ms. Coles and Mr. Sherwood had been in talks in 2019 to partner on a digital-media venture that they called “Project Scoop,” but they put it on the back burner to pursue other things. So when a banker for Mr. Diller got in touch earlier this year, they already had a shared vision for what their version of The Daily Beast could look like, and they pitched Mr. Diller on a partnership.

“The Beast has always sort of punched above its weight,” Ms. Coles said. “I’m excited to have a platform where we can point out the hypocrisies of people in public life, where we can focus on people behaving badly and dig into the details around people that are very revealing.”

Mr. Sherwood and Ms. Coles said it was the perfect time to get back into the news business. The upcoming presidential election, combined with the prosecution of former President Donald J. Trump and the turmoil in the Middle East, underscore the importance of trusted news, they said.

Puck earlier reported that Mr. Sherwood and Ms. Coles were in talks to join The Beast.

Founded in 2008 by the former Vanity Fair editor Tina Brown, with backing from IAC, The Daily Beast gained a reputation for landing a disproportionate share of exclusive stories about media, politics and national security for its relatively small staff — it now has about 100 people.

But the publication’s business never kept pace with its journalistic success. A 2010 merger with Newsweek that aimed to marry the gravitas of a storied newsmagazine with the digital dexterity of a start-up, didn’t last. Mr. Diller sold Newsweek in 2013 to International Business Times.

Despite those struggles, Mr. Diller is optimistic about online news businesses that publish original journalism.

“When something is behind a paywall, the barrier is fairly high to get people to say they will actually pay for something,” Mr. Diller said. “But guess what? It happens all over the place.”