January 31, 2018
A new lawsuit against Bustle Digital Group and Elite Daily is spilling the tea. Sip. Sip.
Lawsuits can be a really great source of information that would otherwise go unnoticed. So when a big media company like Bustle Digital Group (Bustle, Romper, and Elite Daily) gets sued you get a little sneak peek behind the curtain.
In this case, BDG is being sued by a man named Paul Kim. The case, filed in the State of New York, isn’t that interesting on the surface.
Kim says he helped create Elite Daily — a website focused on millennials that was started by three dudes out of college — and was promised a 15% stake in the equity in the company. According to the lawsuit, he never got paid, so now he’s suing.
What is interesting is that Kim claims Bustle paid approximately $50 million to acquire Elite Daily in early 2017, a much higher price tag than was speculated at the time of the sale.
In fact, many reports felt there was NO WAY Bustle would have paid more than $40-ish million — the price Daily Mail reportedly paid back in 2015, when Elite Daily was in its heydey. Afterall, by 2017 Elite Daily was considered a has-been (its traffic had substantially declined and DailyMail called it “worthless”). The terms of the Bustle deal were never disclosed.
Even more interesting than the alleged financial transaction — which is by no means proof of an actual sale price — is the Elite Daily origin story we’re presented with.
See, Elite Daily was a wunderkind when it first appeared. A couple of guys from college started a website to be the voice of their generation and thanks to social sharing it worked. “From the onset we’ve focused on creating a digital media platform that authentically represents the millennial experience,” claimed one of Elite Daily’s founders David Arabov (who is named in the lawsuit) in a 2014 interview.
But according to the lawsuit, Elite Daily didn’t start out as a millennial voice, it was more akin to a cheap money play for horny rich men.
Kim claims that back in 2011 when the founders of Elite Daily first approached him to build the website, they wanted to call it Elite Wall Street “which would provide stock tips by naked ladies to attract an older male audience.”
That’s the site Kim says he started building. He even went through two drafts of Elite Wall Street logos (oh to see those logos!). Then, a couple months later he says he advised the founders to switch the name from Elite Wall Street to Elite Daily. He says he also suggested they switch from soft-core porn stock tips to millennial lifestyle.
“[Kim] turned the Defendants’ ideas into a workable website that succeeded in the marketplace wildly beyond anyone’s imagination, and Plaintiff also provided his own expert opinion what would sell the particular site, which included changing the name from Elite Wall Street to Elite Daily and changing the concept from a soft-porn site to a serious website that attracted millions of followers.”
Of course, the rest is history. Elite Daily went through two sales of around $40 million and $50 million respectively and its male founders laughed all the way to the bank.
Which is all quite comical if you think about it. Elite Daily was started by a few 20-something guys who allegedly wanted to start a soft-porn site and somehow stumbled into a female millennial lifestyle brand. “Elite Daily is a site for and by women who are discovering the world, and themselves in the process,” claims its About section.
Bustle, a women’s media company, was founded by a man who was really good at gaming SEO and looking to make money on women — and said as much when he launched the business.
The two bro-founded sites are now on the same team under BDG … to be a voice “for and by women.”
We reached out to Bustle Digital Group for comment and will update if we hear back.
