Blogonomics: Valleywag's Pay

Jeff Bercovici has already picked up on the mini-tantrum thrown this morning by Valleywag's Jordan Golson. Valleywag, of course, is part of Gawker Media, which pays its writers on the basis of how many pageviews they get. But that "pageview rate", or PVR, gets reset every quarter. Jordan doesn't know what the new quarter's rate will be, which means he doesn't know how much he's being paid.

Jordan's headline is provocative: "I don't know what my salary is," he says. Gawker Media editorial honcho Noah Robischon responds in the comments, calling the headline innacurate. I call this one in favor of Golson. What's happened in this case is that Golson's take-home pay is so much larger than his base salary that his base salary ($2,500 a month) has become basically irrelevant. Instead, he's been relying entirely on his PVR of $9.75 per thousand pageviews - a rate which has seen him taking home more than $4,000 a month so far this year. For Golson, then, his realistic base salary is in the $4,000 range - much higher than the $2,500 which Robischon is referring to.

The problem here could have been partially fixed if Robischon had decided to give Golson a more realistic base salary to begin with. But Robischon's boss, Nick Denton, wants fixed salaries to be as low as possible: he hates it when a writer doesn't justify his salary with pageviews, and the best way of ensuring that situation never arises is to make the fixed salaries as low as possible.

But if writers are earning a great deal more than their monthly base every month, the quarterly PVR cut translates into an immediate pay cut. And as Choire Sicha points out in Golson's comments:

The giant flaw in this is, in the words of one psych prof: "The psychological impact of losing something is about 2.5 times as great as the psychological impact of gaining the same thing." And I don't think the company understands that employees react badly to uncertainty.

If things go according to Denton's master plan, Gawker Media writers see their take-home pay rise steadily from month to month. Every three months, there's a small step down, but over the long term the secular increase in pageviews more than makes up for the quarterly decrease in PVR. Yet even in this best-case scenario what the writers remember - and feel most stingingly - are the pay cuts (imposed from above) rather than the pay rises (which accrue from their own blogging success).

The Denton plan is particularly brutal in the case of Wonkette, where PVRs are being slashed quite dramatically this election year. On a logical level, this makes sense, but on a psychological level it can be extremely demoralizing.

My feeling is that if PVRs change quarterly, then monthly base salaries should as well. If Gawker had been smart about this, they would have told Golson his new PVR in advance - and at the same time given him a sizeable bump in his monthly base pay. The total amount they end up paying him wouldn't have been any higher, but he would probably have been a lot happier about it.

Update: Valleywag's stats were briefly down, they're now back up. It turns out that Golson got 557,469 pageviews in March, which equates to a total paycheck of $5,435. That's well over double his base pay. His colleague Nicholas Carlson earned $9,025 for the month, in which Valleywag as a whole got just over 5 million pageviews. That's an impressive rate of growth, but it does help explain why Denton might want to bring Valleywag's PVR down towards the levels seen in the rest of Gawker Media.

Update 2: Henry Farrell has some very intelligent things to say about all this.