Jim VandeHei wanted more control. Robert Allbritton wanted more credit.
Day by day, month after month, the antagonism between the two men grew. It led, ultimately, to the breakup of their bromance at Politico, the dynamic new-media upstart that rewrote the rules of political journalism.
On Thursday, four days before Iowans officially kick off the presidential election cycle, the Allbritton-VandeHei marriage came to an amicable, and in hindsight perhaps inevitable, unraveling. In a development that surprised even gossipy media and political insiders, VandeHei, 44, announced he will leave as chief executive of the Arlington-based news organization he co-founded nine years ago. Also leaving will be his star columnist and close friend, Mike Allen, and three other senior managers.
As with most blowups, this one was long on the boil, according to several insiders. VandeHei, a strong-willed former Washington Post reporter given to exhorting his newsroom with Pattonesque pronouncements, had contemplated quitting three years ago. He reconsidered, however, calculating that his departure would fatally undermine an operation that was still too shaky to survive without him.
VandeHei may have been right about Politico’s tenuous status then. About that time, an executive of Bloomberg News, former New York mayor Michael R. Bloomberg’s media company, was dispatched to analyze Politico’s financial returns, with an eye toward an investment or a possible buyout offer. The analysis, based on publicly available data, indicated that Politico wasn’t “financially sterling,” nor would it have made a good partner with Bloomberg, now a major competitor, according to a person involved.
Although he stayed, VandeHei never resolved his differences with the mild-mannered Allbritton, 46, the publisher-owner who had his own ideas about how to expand the Politico brand. One point of strategic contention, according to intimates: Allbritton conceived and championed Politico’s expansion into Europe two years ago, a project that VandeHei had criticized as quixotic and beyond Politico’s core strength in U.S. political and Washington policymaking coverage. Allbritton also eagerly approved the hiring of Susan Glasser, a talented but polarizing editor whom VandeHei had worked with at The Post, to oversee the creation of Politico’s magazine.
Allbritton, son of the late Washington media and banking baron Joe L. Allbritton, had his own reasons for growing weary of VandeHei, despite close professional ties and a deepening friendship between the men’s wives. Media accounts chronicling Politico’s rise regularly described the publication’s co-founders as VandeHei and John Harris, another former Post reporter, airbrushing Allbritton from the picture.
But Allbritton was equally a father of the venture, both as financier and a creative factor. The oversights privately smarted, said one person who knows both Allbritton and VandeHei well.
Despite what might be described as an “intimate” relationship between the two, there were elements of competition between them, this person said. They clashed over who would make key management decisions and who got credit for some of the ideas that have helped Politico double its revenue over the past four years, this person said. (Insiders estimate that Politico generated about $70 million in revenue last year, but they do not know how profitable the company is.)
From the start of Politico in 2007, Allbritton made at least one thing irrevocable: He owned the place. VandeHei and Harris were employees, not partners or co-owners. Unlike other media entrepreneurs, they have no stake in the enterprise they created and are compensated only through salary and bonuses. People say Allbritton views Politico as his business legacy, one that he hopes will overshadow his father’s achievements, which included ownership of Riggs Bank, the old Washington Star newspaper and a cluster of TV stations that Robert sold in 2014.
Although VandeHei and Harris appear to have been handsomely rewarded for their roles in creating Politico, they have told friends they won’t come close to achieving the kind of wealth that Business Insider founder Henry Blodgett or Huffington Post diva Arianna Huffington have realized by selling their start-up news organizations. Without equity, a sale of Politico (none is contemplated) would enrich Allbritton, not them.
Hence, VandeHei had another incentive for leaving: profiting from his own ideas, hustle and management savvy by running his own show.
VandeHei will stay in place at Politico until after the election in November, which will leave an awkward 10-month interregnum in which he and his cohorts will essentially be lame ducks. One person at the publication likened the arrangement to estranged spouses sharing the same house but sleeping in separate bedrooms.
“Jim is like Steve Jobs without the nastiness,” said one journalist who has known VandeHei and Allbritton for years. “He has such strong views about where media and business are headed and how to take advantage of it. Some people loved it. But that created obvious tension with Robert. So this wasn’t about strategy or money or whether to grow — it was philosophical. It forced Jim, Robert and then others to think deeply about their futures.”
Allbritton declined to comment. Both he and VandeHei issued mutually supportive statements late last week. VandeHei’s typically reflecting his gung-ho bravado: “Our critics have written of our demise every year, like clockwork,” it said. “Yet we grow in size, power and revenue every year, like clockwork. Here’s my prediction: Politico will clean everyone’s clock again this year — and again and again and again after I leave.”
Politico revolutionized political reporting with its “win-the-morning” editorial imperative, an ethic that turned coverage of politics and policy into a series of minute-to-minute micro-scoops. The publication proved that chronicling politics as an endless horse race was ideally suited to the fast-twitch metabolism of the Internet.
“The genius of Politico is that it recognized that the big newspapers, such as the [New York] Times [and] The Post, would be slow to give up their routines and pace,” said Marcus Brauchli, The Post’s editor from 2008 to 2013, Politico’s formative years. “The evidence is that they were right.”
Harris, 52, says he is committed to remaining at Politico. With a more laid-back personality than the hard-charging VandeHei, Harris avoided much of the executive-suite turmoil of the past 18 months by decamping to Brussels, where he oversaw the creation of Politico’s European offshoot. The publication debuted last year and is reportedly meeting its financial targets.
The other marquee player in this drama, Allen, who writes the popular insider tipsheet Politico Playbook, will join VandeHei in his new venture next year. The two men have a long and mutually supportive relationship going back almost 30 years; the courtly Allen often credits VandeHei for the advice and guidance that have transformed him into a kind of latter-day Walter Winchell of Washington.
Allen’s loss is significant; in addition to generating millions in annual revenue through Playbook sponsorships, he is Politico’s biggest brand name. His star power eclipses both of his newsroom bosses and certainly that of the low-profile Allbritton.
Neither Allen nor VandeHei has publicly spelled out what he intends to do next; VandeHei says he doesn’t really know. They have vowed not to compete directly against their former shop.
The other departees — chief operating officer Kim Kingsley, chief revenue officer Roy Schwartz and digital specialist Danielle Jones — grew weary of the infighting between VandeHei and Allbritton, according to intimates, and saw VandeHei’s abdication as a fortuitous point to disembark. Kingsley and Jones are unlikely to join VandeHei and Allen in their new operation next year, according to people familiar with their plans, although Schwartz has indicated that he will.
Whether the mass exit will diminish Politico’s trajectory is conjecture, but at least from the outside its foundation seems secure at the moment. The privately held organization had nearly 500 employees at the end of 2015, including 300 journalists. Last year alone, it added 150 positions, expanding into state capitals and to a new continent. It brags that it will soon be the largest political news-gathering operation in the world.