SBNation and the Employment Market

How We Got Started

Just over 13 years ago, I and a couple college friends, on a lark, started a blog following sports at our alma mater, the University of California, Berkeley. From the beginning, the California Golden Blogs has never been a job. It has been work, sure, and yes, it's brought in an an exceedingly modest income over the years, but those things don't make it a job, do they? Well, the State of California seems to disagree, and that's why we're here today.

CGB began as an independent fan site, its creators driven by their Cal fandom, their desire to find an online community with which to share that fandom, and, of course, their boredom with their day jobs. It was a labor of love, with no intention of ever monetizing our work, and indeed we were surprised the first time we were approached about putting ads on our site. That our traffic numbers even justified such an investment was a bit of a surprise to us. We were amateurs -- and we knew it -- yet readers, collaborators, and eventually SBNation took us more seriously than we ever did.

Our relationship with SBNation has changed a bit since we began our affiliation, but for me, the essential bargain has remained the same over the last 11 years -- SBNation provides a best-in-class publishing+community platform, CGB provides content+community moderation, and as long as SBNation leaves all of the editorial decisions to us, I've been happy enough.

However, I can't say my motivations in starting CGB have been the same as every one of the dozens of writers who have contributed to the site over the years. Many have been as casual as myself, but others welcomed the opportunity to make a little money for their writing, and a few have used the site as a springboard towards bigger opportunities in sports journalism. You could look at CGB as being part of the minor leagues of sportswriting, and you wouldn't be wrong.

Are we employees, or something else?

The minor league analogy is especially apt given the current issues regarding employment and exploitation that Minor League Baseball is currently experiencing. If, as AB5 mandates, we're forced to consider CGB's writing staff not from a fan-collective angle, but in terms of employment, we start to run into some big, hairy questions, namely:

• Are we employees or contractors? Volunteers? Something in-between?
• Are we being exploited for the work that we do?
• How much is our writing actually worth anyway?

The grey area of quasi-employment that CGB's writers reside in represents a spectrum, one that traditional categories of work, especially those that have been codified into law, ostensibly to try and prevent worker exploitation, just don't seem to have a really good way to handle.

I'll start by saying that I am not an employment lawyer, and I'm approaching these questions from a layman's point of view, considering a person's internal motivations as much as the actual, legal circumstances.

Are we employees of SBNation? I can't speak for anyone else, but it sure doesn't feel like employment to me. I've never been told what to write or what not to write, how much or how little to write. Oh, SBN does have targets for # of posts and such, which a few of our staff work hard so that there's never been a question as to whether we'd surpass those targets, but in general, management has, with respect to CGB, operated with the lightest touch imaginable.

Are we freelancers? Not really. In general, we don't shop around our writing (although we are free to do so), and while we might pitch stories to each other, we also exercise editorial control, and we're certainly not paid on a per-submission basis.

Are we contractors, then? This definition fits some of us, though not myself. The contract is nebulous, though, with the work scope and quality provided being vague in nature, and the pay seemingly only having a tangental relationship with the work actually provided. Indeed, the sort of editorial control and oversight we are delegated is far broader in latitude than what one would typically give to a contractor. It certainly isn't work-for-hire, but you can imagine some other money-for-writing relationship that could be formalized in a contract.

Are we volunteers? Maybe some of us? CGB isn't a charity or a non-profit, though, so while it makes sense for engaged members of a community to volunteer in various capacities to support that community, it makes almost no sense for them to do so for the benefit of a for-profit enterprise for which they have no interest. It comes down to how you view CGB, I guess. Vox/SBNation is clearly a business. But is CGB? Or is it a community that lives and thrives on the substrate of an online platform, much in the way a community might spring forth from and leverage a Facebook group or on a subreddit?

For my own part, I would consider myself best classified as a "hobbyist". This is a fun thing I do, and while I might incidentally make (or spend) money along the way, remuneration is not my primary motivation, and does not factor into how I govern my activities (the IRS, for what it's worth, disagreed when I tried to classify my blog income as "related to a hobby").

Are we being exploited?

However, all of this makes it difficult to answer the question of "are we being exploited?", for that question depends on your status. As a hobbyist, I get to leverage a platform, for free, to further my own personal interest, which is primarily talking about Cal sports when I should be working at my day job. I don't feel exploited because I consider the platform's continuted existence and support compensation enough. However, I'm contributing alongside fellow writers and editors who are not hobbyists but are more accurately described as minor league sportswriters, budding professionals who deserve to be paid honest wages for honest work. That their passion for Cal sports and for writing about it helps them do this job is important from a quality of output standpoint, but no one is suggesting that Gerrit Cole should have taken less money from the Yankees because he enjoys playing baseball.

Indeed, it brings up a rather uncomfortable question for myself -- does my very willingness to contribute amateur hobbyist sportswriting actively harm the market for budding professional sportswriters, perhaps preventing some of them from pursuing this path professionally because they can't make ends meet doing so? I'm positive that the gap in writing quality between myself and anyone who is likely to become a professional writer is obvious for readers to see, but I'm less certain that the market for the sort of fan-driven, casual sportswriting that I engage in cares to differentiate between us.

If we're really to determine whether any of us are being exploited, and if so, by how much, we need to answer the thorniest question of all, which is "how much is our writing worth?" A True but Useless answer is "whatever the market is willing to pay", useless since we are hardly operating under Perfect Market Conditions, and besides, I'm more interested in a different valuation anyway, namely the marginal value of our writing to our employer, SBNation.

If, as is claimed, SBN's writers are underpaid, that would imply that SBNation could be paying writers a lot more for their work than they do and still turn a nice profit. The further claim is that SBN is able to get away with offering such low rates by exploiting the writers' hobbyist leanings to pay them much less than they'd have to pay a comparable professional sportswriter. Without looking at SBNation's books, it's hard to know what they could afford to pay content creators and still operate as a business. Still, I think we can generate some useful estimates.

What is our work product worth to the company?

** Warning, numbers follow **

First, what does it take to produce CGB's content? Over the past couple years, CGB has posted just north of 1000 posts per year, roughly 3 per day on average (the monthly average is cyclical with the sports calendar). This is actually down more than 50% from 2015, when CGB published nearly 2600 posts, more than 7 per day on average! These posts range in terms of level of effort, from low-effort open threads to discuss live sporting events to meticulously-researched analysis posts, complete with marked-up screengrabs of game film. However, I'll claim that on average, generating each individual post requires around 2-4 hours of work, at a minimum, with some much greater than that.

So, at 3 posts per day, we're already seemingly like we're bumping up against 8 hours of work a day, every day, no days off for weekends or holidays (indeed, attending football games on Saturdays becomes part of the gig). And we haven't even begun to factor in the additional effort of manning the Twitter account to help drive traffic (134k tweets over the past 10 years, roughly 37 tweets per day), as well as countless hours spent interacting in the comments section, building community engagement and moderating user content.

Given all this, I would argue that there's no way to replicate the content+community building of CGB with anything less than 2 full-time professional sportswriters, probably with some part-time help as well. That CGB maintains an active staff of part-time contractors much larger than this should be further evidence.

What would two full-time sportswriters in the Bay Area cost? According to this data, at rock-bottom prices, you might get an entry-level writer for $35k/year, but given the amount of editorial responsibility you'd be asking of your writers, you'd better to be prepared to pay at least one of your writers an above-average salary, north of $55k (still not that much for the Bay Area). Maybe your rock-bottom intial budget would be $90k, but at those prices, you should be perpared for significant turnover as writers gain experience and move on to better-paying gigs. Long term, I would expect a budget of least $100k in salary to staff this site.

OK, so that covers staffing; what sort of return could you reasonably expect for your $100k investment? SBNation is a purely ad-driven model, so I'll start by estimating how many ads I can show to all the traffic I'd be generating, and figuring out how much I could gross from that.

Start with pageviews -- assume this data is correct, and 193k monthly visits * 2.88 pages per visit results in roughly 500k pageviews/month. Assume an average of 3 ads per pageview, and maybe I'm generating 1.5M ad impressions per month. Now, ad rates can vary quite a bit across industries, but to get a sense of scale, Google's AdSense claimed that the average CPM (cost per 1000 impressions) for ads across its network in Q1 2018 was $2.80. Applying that across 1.5M impressions would generate roughly $4200/month, equivalent to just north of $50k/year.

Now this number could be low -- my estimates for both total impressions as well as CPM rates could be under the actual rate, and the site's revenue scales with both numbers. Moreover, SBNation will work regularly with promoted campaign partners, who will pay a premium for broad, highly-visible exposure across the network, so there could be additional revenue potential generated there.

However, before CGB's staff can get paid, there's a lot of other overhead costs that need to be accounted for. Even assuming there aren't any costs for editorial oversight or services, SBNation still has to pay for hosting, operating, and maintaining the wbesite, to say nothing of ongoing software development costs for the platform as a whole. They also have to pay for marketing folks to generate those sweet promotional campaign partnerships, as well as HR/payroll/management folks to run the operation, to say nothing of all of the miscelaneous costs of running a business, such as office space and taxes. SBN's operations scale across hundreds of similar sites, so many of these costs shrink on a per-site basis as you scale out, but it would still not surprise me to see 30-50% or more of the revenue generated by CGB taken off the top for these overhead costs.

Given all of this, it just doesn't seem possible that the content currently generated by CGB could possibly generate enough revenue to pay the full-time staff necessary to produce it. Even if we compromise on salaries, I think it's entirely possible that there's no living wage SBNation could pay to all of its writers and contributors, for all of the content they produce, that would enable the business to ever come close to producing a profit. There's too much content, and too much of it is niche, to ever fully staff this operation with people relying on it as their primary source of income. Yes, some sites focused on popular pro sports teams might scale enough to employ full-time writers, but of the currently affected California-based blogs, only 2 of more than a couple dozen currently are at that threshold. The somewhat obvious conclusion is that SBNation relies on low-wage contractors not necessarily because they're greedy, but because their business model doesn't work any other way!

What sort of work should we allow, anyway?

It's possible for both of these things to be true: 1) SBNation writers are underpaid relative to the value they generate for their corporate overlords, and 2) SBNation literally cannot afford to pay them all full salary+benefits and remain a going concern.

What I'm driving at here is that there is a class of economic activities for which one could be compensated, but not necessarily at a rate that allows for a sustainable living wage. I certainly engaged in such activities in high school, mowing lawns and delivering newspapers (to say nothing of my first unpaid internship). The only reason I could do these jobs is because I was primarily supported by someone else (my parents) and didn't need the money to live on. However, these sorts of activities have always been ripe areas for exploitative employers (why pay someone when an intern might do it for free?), and even worse, such practices close off opportunities from those are aren't already well off enough that they can afford to work for such meager compensation.

There's a real debate to be had about if these should even be jobs at all, with workers' advocates saying you shouldn't hire anyone if you can't pay them a living wage. I think that's a strong argument, because without such protections workers can and will be exploited on the basis of their relatively weak market power. At their core, unions exist primarily to fight against this same sort of management/labor power imbalance.

However, I also think there's a spectrum of legitimate, valuable economic activity that falls below the line of earning a living wage (maybe not jobs, but "job-ish"), and we should craft public policy that allows for this activity to continute -- as long as it is not exploitative. This gets tricky, because potential employers want to pay whatever the market will bear, but potential workers often lack the leverage to turn down work that offers too little return to live on by itself, leading the market to settle at poverty rates. Preventing exploitation of these workers is an important public policy goal; if I knew how to accomplish it, I would tell you, but I suspect the answer is not AB5.

Of course, for all of AB5's faults, SBNation did not have to react the way they did. Nothing in the bill mandated that they fire all their contractors and classify everyone as either "full-time employee" or "engaged volunteer". That they let their contractors go rather than restructuring their contracts to comply with the law indicates that they knew their relationship was exploitative, and that there was no profitable way to modify it and still come into compliance with the new law.

And this makes me sad. Sad for the many writers who are being shoved unceremoniously out the door because a law meant to protect them is now effectively preventing them from working at all. And sad for the future of the SBNation platform. Say what you want about the business, but as both a user and a contributor, I really like the product, and the sort of community engagement that it engenders. I don't know what the right business model is to keep it both sustainable and non-exploitative, but it would make me very sad if such a good thing went away because we couldn't figure out an equitable distribution of the profits it generates.