KPMG appointed to oversee Joe Media administration
Joe Media, the parent company of social news website Joe.co.uk, has appointed administrators from KPMG. The London registered company collapsed after the network it was part of, Maximum Media Network, saw an examiner appointed in Ireland at the allegation that it owes millions in outstanding loan repayments.
The rough-and-ready world of online media looks to have spectacularly ground to a halt in recent years. While advertising revenue was initially easy to come by – seeing investors willing to throw money at many platforms and accelerating the growth of the market – the boom has turned to a bust in spectacular style.
Exemplifying this, in late 2018 Leonard Curtis was appointed administrator of viral news and pop culture website Unilad. The site, best known for its regular updates on Facebook, collapsed after accruing debts of more than £6 million.
Beyond this – boosted by a number of asset-stripping operations by private equity firms in the digital media space also saw mass layoffs hit Spin, ThinkProgress, Rooster Teeth, and others – the continuing decline in digital media saw the total number of media layoffs in 2019 above 7,200, according to Business Insider estimates. Now, as the sector continues to decline, KPMG has been appointed as administrator and is seeking a buyer for the London-registered Joe Media.
The best known aspect of the business is Joe.co.uk, which produces viral videos, and came to prominence with a slew of political mash-up videos during last year's Brexit negotiations and general election campaign. It claims 13 million followers across its social channels, and works with multi-national clients including McDonald's, Sony Playstation and adidas.
Despite the firm’s success in terms of clicks, however, it has not built a solid financial base for itself. Joe Media entered the UK market five years ago as a subsidiary of Ireland-based Maximum Media Network, which was founded in 2010 by Niall McGarry. That particular group has come under intense scrutiny recently, as an examiner was appointed to Maximum Media Network by a court in Ireland at the request of creditor BPC Lending Ireland DAC.
The creditor has claimed it had advanced more than €6 million to Maximum Media as part of a 2018 loan agreement; an agreement which featured monthly repayments set at €68,000. However, BPC claims the balance due has increased to €6.1 million, and Maximum Media failed to pay interest on the loan in March and April. At the same time, a request for a “a capital and interest moratorium” was denied.
This will have done little to help Joe Media’s shaky accounts closer to home. Its most recent reported figures for the year ending December 31 2018 saw Joe Media register huge losses of £1.7 million, with net liabilities of around £5.5 million. This was not long after it had opened an office in Manchester to house its FootballJOE brand, claiming at the time it would house as many as 30 staff.
In a statement, joint administrators Stuart Irwin and Ian Leonard of KPMG said, “The administrators are continuing to trade the company and intend to undertake a marketing process with a view to selling the business as a going concern. At this time there are no plans for any redundancies. The joint administrators conducted a staff briefing outlining their plans.”
