Axios Buys Charlotte Agenda, a Digital Start-Up, as Part of Push Into Local News

The site focuses on service journalism for North Carolina’s largest city. Now it has been scooped up in a deal valued at nearly $5 million and will be a partial model for other cities.

Ted Williams started The Charlotte Agenda, a local news site, with $50,000 of his own money at a time when newspapers in small cities were dying out.
Ted Williams started The Charlotte Agenda, a local news site, with $50,000 of his own money at a time when newspapers in small cities were dying out.Credit...Symphony Webber/Axios Charlotte
Edmund Lee

In the winter of 2015, Ted Williams was at the dinner table in his four-bedroom house in Charlotte, N.C., bending his wife’s ear about the future of the news media business.

At the time he was the head of digital strategy at The Charlotte Observer, and he kept telling his wife “that tomorrow’s media companies were being born right now!”

She couldn’t take it anymore, Mr. Williams said in an interview on Wednesday, telling him: “I can’t have a lot of nerdy media chatter here.”

“What she meant was, ‘If you want do it, just go do it,’” he said.

So that year — at a time when local news outlets were disappearing at an average rate of about 10 per month — Mr. Williams took out $50,000 from his personal savings and started The Charlotte Agenda.

There would be no printed paper, just an emailed newsletter, a website and an Instagram account. Mr. Williams, 36, decided it “should be all about creating useful content that is conversationally told to our friends and neighbors.” Which restaurant should you try? What’s the best school in your area? How do you go about requesting an absentee ballot?

“It’s as simple as that,” Mr. Williams said. “You need to help people to make smarter decisions faster.”

The plan worked. The Charlotte Agenda has thrived. It’s free for readers, supported by advertising and a membership program that has 1,700 supporters. It also has 235,000 Instagram followers and 55,000 newsletter subscribers, who on average open the emails sent to them 40 percent of the time, a phenomenally high rate compared with the industry average, which is half that. The website itself attracts 650,000 readers a month.

In 2017 the company generated $1.3 million in revenue and pretax profit of more than $400,000, according to two people with knowledge of its finances who were not authorized to speak publicly on the matter. The following year The Charlotte Agenda made $1.9 million in revenue. Last year the site topped $2.2 million. Each year the profit margin was over 30 percent, the people said. Even during the coronavirus pandemic, the business has stayed healthy, on track for about $2 million in 2020 sales.

That caught the attention of executives at Axios, the quick-twitch news site started in Washington by Jim VandeHei, Mike Allen and Roy Schwartz.

Axios, which recently announced a plan to expand into local markets, on Wednesday agreed to buy The Charlotte Agenda for close to $5 million, the two people said. (Mr. VandeHei, who serves as the Axios chief executive, and Mr. Williams declined to comment on financial figures.)

“There is an audience — and real revenue — in cities,” Mr. VandeHei said in an email. “It’s a tough nut to crack, but creating a daily habit for local readers who care deeply about local issues stirs the possibility of starting to solve the local news crisis.”

Axios plans to have sites in four other cities — Tampa, Denver, Minneapolis and Des Moines — taking as part of its model Mr. Williams’s approach in Charlotte.

“If this works in these five cities, particularly if we can replicate the business success of Charlotte, we will move fast to scale it to as many cities as humanly possible,” Mr. VandeHei said.

The Charlotte Agenda is still very small. Of its 11-person staff, six work in the news department. Mr. Williams has added employees only after cutting big ad deals.

He recently stole away reporters from The Charlotte Observer to cover local politics and business, as well as to work on more deeply reported stories. In July, as the pandemic ripped apart the economy, The Charlotte Agenda started to supplement its service journalism by chronicling the rise of homelessness in the city, a metropolis that recently surpassed San Francisco in population.

“I knew I wanted to get into deeply reported news and journalism, but that costs more money,” Mr. Williams said. “So we waited couple years before we made that investment. It’s not that complicated. You need really smart journalists. Not any fancy tools and growth hacking things.”

He added: “I think media is a very simple business that people tend to overcomplicate.”

Mr. Williams, who grew up in a Florida beach town and played on the golf team at Washington and Lee University, will continue to run the site — which will be renamed Axios Charlotte — after Axios takes control. He will also be the general manager of Axios’s local news effort.

Axios has excelled by covering topics important to power centers — Washington, Wall Street, Silicon Valley — and its newsletters have attracted sponsorship dollars from corporations that hope to influence legislators and decision makers. Facebook, for example, which is under fire from both sides of the political aisle, is a sponsor of “Axios AM,” its largest newsletter.

Axios expects to top $61 million in revenue this year — a 40 percent bump over last year — and remain profitable, said two people with knowledge of its finances. The company has 1.4 million email subscribers and has raised about $57 million so far. It has been valued at over $200 million.

For its local expansion, Axios plans to staff two people in each new city who will pull together a daily morning newsletter, and hopes to add staff in all cities over time. Technology, editing and other support will be centralized at Axios headquarters to keep costs down.

The Charlotte Agenda gained a following partly by taking advantage of social platforms in ways that many traditional news companies have yet to adopt. When Katie Peralta was a reporter for The Charlotte Observer, she recalled that her friends and family members often talked about what they had read in The Charlotte Agenda. She said it annoyed her whenever her younger sister would mention that “such and such business is closing, according to the Agenda’s Instagram,” Ms. Peralta said.

“I saw this as competition, because I was on the business beat,” she said. “So whenever they scooped me, it made me upset.”

Ms. Peralta made the uneasy decision to leave the Observer for The Charlotte Agenda last year. “The Observer is one of the most respected, most established publications in the Carolinas,” she said. But the idea of leaving became easier to justify as she witnessed cutbacks in the Observer’s newsroom.

“All of my mentors had left,” Ms. Peralta said. “The staff was much thinner. With every fresh round of cuts and buyouts it was getting to be too much.”

The Observer is part of the McClatchy Company, a large newspaper chain that filed for Chapter 11 bankruptcy protection in February and was sold to Chatham Asset Management, a New Jersey hedge fund, in August.

Ms. Peralta said she got 45 percent salary bump when she went to The Charlotte Agenda. But the real perk was having more of a say in the newsroom.

“It’s not everywhere where you can tell your boss, ‘Hey, Ted, that’s a stupid idea,’ and not get in trouble for it,” she said.