Arianna Huffington's $18 Million Moment

AOL paid a jaw-dropping $315 million for the Huffington Post, but who's getting what in the deal?

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The $315 million AOL paid for the Huffington Post got media types talking. But how much of that went to Arianna Huffington herself? According to the Drudge Report, Huffington, who co-founded the Huffington Post in 2005, is expected to net $18 million from the deal, and earn about $4 million a year in her new role overseeing AOL's editorial operation. Because the Huffington Post isn't a public company, nailing down just how much each partner gets depends on solid insider information or public disclosure. But as The Guardian's Graeme Wearden notes "some shareholders must be sitting on very large returns, as the company has received just $37m of funding over the last six years." But even with those kinds of returns, people are still asking whether Huffington and her partners could have scored even bigger with an IPO or another suitor.

  • This Was Easy Money Business Insider's Nicholas Carlson argues that AOL's offer to pay cash now was a lot more attractive than an IPO. With $300 million cash in play, Huffington and her partners had the choice of taking a guaranteed payout over the risky move of having to raise money or go public. The latter, Carlson, says could have taken years, and "there would be no guarantee that the IPO market would be there when you wanted it." Even worse, Carlson says the economy could have completely tanked when and if an IPO finally came to fruition, leaving Huffington and her partners holding the bag, unable "to even cash out."
  • There Was No Better Offer  Dismissing Huffington's assertion that "the Huffington Post was not for sale," Business Insider's Carlson says of course it was for sale--"Huffpo has talked to NBC and Yahoo in the past 6 months. NBC, presumably, wouldn't have gotten anywhere near this price. Yahoo, apparently, was moving at a glacial pace."
  • The Deal Gives HuffPo Credibility  For all the content pouring through the Huffington Post's 26 channels, The Los Angeles Times' Jessica Guynn says it wasn't taken seriously in the realm of journalism because it aggregates content instead of creating it. With AOL's tech, auto and local news sites, the Huffington Post can get some credibility.

But was it a good deal? Gawker's Nick Denton quipped, "I thought they were holding out for a billion."

This article is from the archive of our partner The Wire.