The money has run out for Unilad and so has the banter, with staff at the viral Facebook publisher, which has collapsed into administration, partly blaming the nifty financial footwork of arch-rival LadBible for leaving hundreds of jobs on the line.
The Guardian has learned that Unilad’s administration on Thursday was accompanied by the decision of LadBible to buy up a substantial part of the company’s debt, prompting accusations that one group of lads is attempting to drive the other group of lads out of business.
It has also been established that Unilad’s debts are in the region of £10m, larger than previously reported, with half of that now owed to LadBible – meaning Unilad’s main rival is now a key voice and potential bidder in any takeover talks for the company.
Understanding this story involves unwrapping the strange tale of how two Facebook-centric outlets, both run by twentysomethings with an instinctive understanding of how to get attention online, rose to prominence as part of the viral publishing boom that began in the early 2010s.
It’s also a cautionary tale of how even companies that dominate the world of online publishing – LadBible is the biggest Facebook publisher in the world, with Unilad in fourth place – can reach tens of millions of people thanks to a diet of animal videos, sports clips and shocking news stories, but still find themselves struggling financially.
“We had an offer of purchase from LadBible two weeks ago and they were very keen to take out their biggest competitor,” UniLad’s managing director, John Quinlan, said, claiming the administration process is flawed and could leave his staff out of work. “As soon as they heard about the situation with Alex’s debt they went very quiet.”
“Alex” is Alex Partridge. He was a student in 2010 when Facebook was sweeping across university campuses and was one of the first people to realise the potential of Facebook pages to reach a large audience through the site with a stream of occasionally sexist and homophobic viral “banter”, which drew headlines at the peak of the concerns over the spread of lad culture.
One of the pages created by Partridge was LadBible, which he sold to another student named Solly Solomou, who developed it into a successful business. Another was Unilad, which Partridge agreed to develop into a standalone company with two partners before being forced out in 2013, prompting years of legal proceedings which ended when a high court judge awarded him £5m.
Unilad’s parent company, now employing more than 200 people in Manchester, London and New York, struggled to service the debt and it was Partridge – plus an unexplained £1.5m tax bill – who pushed them into administration.
Quinlan said his company has been lining up outside investment in a bid to stay solvent and save jobs but this was derailed by LadBible’s interest in Partridge’s debt: “A couple of weeks ago we had a proposal that we accepted. But that was before Alex sold his debt to a third party and that changed the dynamics.”
LadBible confirmed they had made an approach for Unilad but insist they were rebuffed. “After the administrator was appointed we acquired Alex Partridge’s debt of £5m … We want to get the best recovery we can for the debt that we own.”
Unilad’s ability to operate as an ongoing business is also under threat as employees lose access to the site. In an email to staff, Quinlan said that the administrators had locked Unilad staff out of the site’s WordPress account, meaning they are unable to write articles and update the homepage. The social media team is also allegedly locked out of the licensing platform that Unilad uses to find and buy videos to maintain its Facebook pages.
“These actions are not consistent with keeping the business running operationally and maintaining value in the business,” said Quinlan, insisting the situation had been “escalated to the highest levels politically” and urging Unilad’s staff to contact their local MPs.
One industry insider with knowledge of Unilad described it as a very good business that’s been grossly mismanaged and is paying far too much money on staff for a company with a revenue of £10.7m a year.
“It does good revenue and good profit but cannot sustain itself,” the insider said.
Other individuals with knowledge of the administration said Unilad was paying for leases on large amounts of equipment, including computers and a table football game.
Both companies developed their original Facebook pages into advertising businesses while attempting to shed their old un-PC reputations, often with a focus on original material around themes such as men’s mental health. At one point LadBible even decided to rebrand what a “lad” meant, pointing out that a large number of women view its content. Still, not everything changed. LadBible was forced to apologise earlier this year after it accidentally hired a topless dancer for its summer party and Unilad’s co-founder left the site around the same time after a former employee posted accusations of misconduct and drug use.
But while LadBible grew and diversified away from Facebook into Instagram and original series, winning several awards at the Cannes Lions advertising festival, Unilad remained Facebook-centric, meaning it was hit hard by this year’s algorithm changes, according to staff.
Quinlan continued to claim that his site has “got a better product” than LadBible and claimed the administrators had worked with LadBible to set a tight timeframe. Expressions of interest are due over the weekend, with the leading party then due to place a non-refundable deposit with the aim of concluding a deal within a week.
The administrators Leonard Curtis did not respond to specific criticism from Unilad’s current owners, but said they had had a “significant level of interest and commenced providing interested parties with information”.
One employee at Unilad’s Manchester office, which focuses on editorial output, described staff – mainly aged under 25 – as “riled, crying, and arguing” while facing up to the possibility of not being able to pay the rent at the end of the month. They also reported that the London office, which handled head office functions and sales, had been closed completely.
“LadBible is a rival of ours, we have arguments with them every day,” said the employee. “The consensus is that LadBible is going to buy us, shelve us, and then make us redundant.”
LadBible did not comment on whether they wanted to shut down the site, or whether – as the main creditor – they were interested in buying Unilad’s assets: “We don’t know enough yet to form a view and ultimately, it’s up to the administrator.”
