NEW YORK>> On a sunny morning in early October, Joanna Coles, clad in a stylish tomato-red coat, and Ben Sherwood, dressed more demurely in a corduroy jacket, convened at their regular breakfast spot, the no-frills Star on 18 diner on the Far West Side of Manhattan.

The two veteran media executives were talking about their ambitious plans for The Daily Beast, the 16-year-old money-losing news website, in which they jointly acquired a minority stake in April.

But along with the predictable optimism about the mission they are taking on and enthusiasm about early signs of audience uptick and subscriber growth, Coles, a former chief content officer of Hearst Magazines, and Sherwood, a onetime president of ABC News and Disney TV chief, also conveyed a sense of frustration.

Frustration that they weren’t greeted by the staff they inherited as warmly as they expected. Frustration that the site’s tech problems meant they’ve had to buy multiple subscriptions just to log in. Frustration that convincing the newsroom of their editorial vision has been an uphill climb.

Less than three weeks after the pair’s takeover, New York magazine published a detailed report on the friction between reporters and Coles over story suggestions from her that they deemed ridiculous, including an investigation into whether President-elect Donald Trump was having stress-induced flatulence during his criminal trial and a list of the most obese members of Congress. (Neither article ran.)

It was clear that many of the sources for the report were inside the organization, with one unnamed staff member bluntly criticizing the new owners’ “warped vision” of the news site.

“This thing came within a day of being sold to the private equity knacker’s yard, where it would have been stripped,” Coles said later in an interview at the Beast’s offices in Chelsea, using a British term for a slaughterhouse.

“In what way is it helpful to tape our conversations and to proudly boast that you are not going to even attempt to look at the stories that your new bosses are asking you to look at?”

“To me, that’s just, like, ‘No wonder the place is going out of business,’ ” she added.

Giving it “one last chance”

The Daily Beast, launched in 2008 by longtime magazine editor Tina Brown and backed by media mogul Barry Diller’s IAC, became known over the years as a cheeky and aggressive tabloid with reporting on politics and national security that often had an impact belying the relatively small size of its newsroom. In recent years, it published a series of damaging scoops on Republican Senate candidate Herschel Walker and broke the news of the arrest of sex trafficker Jeffrey Epstein.

Named for the fictional newspaper in Evelyn Waugh’s “Scoop,” The Daily Beast gave a platform to a new generation of writers, including Taylor Lorenz, Jamelle Bouie and Molly Jong-Fast. When Brown started the site — after stints editing Vanity Fair, The New Yorker and, less successfully, Talk magazine — she preached a mix of “high-low” stories.

“The Daily Beast at its best was mischievous, subversive and absolutely 100% dedicated, often to the point of sociopathy, to breaking big news,” said Noah Shachtman, its editor-in-chief from 2018 to 2021. “If you look back at this moment in previous election cycles, the Beast played an incredible role.”

But the outlet continuously lost money, and audience traffic has declined over the last two years.

Fed up with the losses, Diller tried to offload The Daily Beast, at one point considering a deal with Hollywood publication The Ankler and then looking to sell to a private-equity-backed publisher before landing on the partnership with Sherwood and Coles.

“It was imminent: We were selling the Beast,” Diller said in an interview. But after meeting with Sherwood and Coles, he felt their plan made sense. “I want to give it a last chance,” Diller said. “It’s very early in the process, but I am more than pleased that we made that decision.”

Sherwood, 60, and Coles, 62, were jointly granted a 49% equity stake in the business, returning them to the day-to-day scrum of a media company. (None of the parties would disclose the financial details of the deal; IAC retains majority control.)

The two seem, on the face of it, an odd pairing. She’s a glamorous Briton who conquered the world of glossy magazines and is best known for her star turn as editor-in-chief of Cosmopolitan from 2012 to 2016. He’s a Harvard-educated Rhodes scholar who made “Good Morning America” the top morning news show while president of ABC News from 2010 to 2014, before being promoted to oversee Disney’s TV group.

The thought of returning to a newsroom thrilled both Sherwood and Coles, especially one that had the benefit of years of brand building under editors including Brown, John Avlon (recently running for Congress), Shachtman (who went on to lead Rolling Stone) and Tracy Connor, who had come to The Daily Beast from the NBC News investigative unit.

But Coles, who serves as the chief creative and content officer and runs the editorial side of the operation, and Sherwood, who is the publisher and chief executive, had to immediately confront the fact that the media landscape had changed significantly in their time away from it. In the past few years, BuzzFeed News has shut down, Vice Media filed for bankruptcy and other publishers did mass layoffs. And new competitors kept coming: Puck, Punchbowl, The Free Press, Semafor, the various writers building their singular empires on Substack (including, recently, Brown herself).

The Beast was on track to lose $10 million this year, Sherwood said, and had been losing money and audience for five consecutive quarters before the deal in April. “The plans that had been set in place were on a path to lose tens and tens of millions of dollars, and that path was no longer viable and IAC was no longer going to do that,” Sherwood said.

That was the message he and Coles delivered when they met with the staff of The Daily Beast for the first time on April 15. They thought the newsroom would be relieved that it was now in the hands of experienced media executives with serious bona fides who were committed to revitalizing it.

Beast staff saw it differently. According to interviews with nearly a dozen former and current members — some of whom shared notes taken at the first meetings with their new bosses and all of whom asked to remain anonymous out of fear of jeopardizing their career prospects — Sherwood and Coles came across as aggressive and relentlessly negative about the state of the Beast and the work that its staff was doing.

Reporters started leaving, including Washington bureau chief Matt Fuller and some of his political reporters. (Fuller’s replacement, Martin Pengelly, a journalist from The Guardian, lasted five weeks in the job.) In June, Connor, the Beast’s editor-in-chief since 2021, was replaced with Hugh Dougherty, an editor from The New York Post and, like Coles, a veteran of the British press. Sherwood and Coles announced a voluntary buyout program with an aim of cutting costs by $1.5 million. By early July, the Beast’s head count was down about 35% through the buyouts and a handful of layoffs.

Extremes of wealth and power

Coles has a specific vision for what the Beast can do: shorter and sharper articles that focus on people, power, politics and pop culture, with a dose of satire to lighten the mood during a perilous time. She said she is fascinated by the extremes of wealth and power and behavior, and pointed to articles about A-list celebrities who gave Sean Combs cover and the troubles of Will Lewis, the CEO of The Washington Post, as recent highlights.

“I wanted something that curated a lot of news out there that wasn’t about the end of democracy all the time,” she said.

She is trying to spark ideas and reinvigorate the newsroom’s culture, which she said had been affected when the pandemic caused more people to work remotely. Beast employees are now required to work in the office four days a week.

“We have some really good people here who were here all along who are excited by the mission and reenergized,” Coles said.

There had been “a Niagara of news,” as Coles described it, in the lead-up to November’s election, but the Beast’s newsroom is now less than half the size it was six months ago. And days before the presidential election, the Washington bureau was staffed with just two people.

“They saved us, to what end?” one reporter who has left the Beast asked. “What is The Daily Beast now, and is it better?”

The lack of staffing during an intense news period has turned the newsroom into a churn factory, according to people with knowledge of the work environment, with pressure on employees to pump out articles to generate as much reader traffic as possible. The newsroom has been asked to publish 40 posts a day, which is what it was producing before the staffing cuts. According to a presentation given to the newsroom in September, a copy of which was obtained by the Times, The Daily Beast published more than 210 articles in three days around the presidential debate in September.

Despite criticism of the Beast’s editorial approach, Sherwood credited the heightened news cycle over the past few months with helping the site record four months of subscriber growth. Data from measurement firm Comscore showed a recent bump in visitors to the Beast’s site, with 21.3 million in September, up from a monthly average of 13.8 million in 2023.

“They have had a profitable month or two, which historically has not happened at the Beast,” Diller said. “That is quite significant.”

Sherwood said they were stabilizing the business by getting the staff to the right size, fixing the technology powering the website and migrating to a new content management system. (The company recently added a president and chief operating officer, tech entrepreneur Keith Bonnici.) Sherwood said they would focus on growth in their second year, such as exploring new revenue streams.

“We are totally aware of how hard and adverse the conditions are,” Sherwood said, but “we’re more optimistic in the path than ever with independent, feisty, intelligent tabloid journalism.”

Brown said she had advised Coles on “reviving the talent” and getting a mix of seasoned reporters and young writers.

“The Daily Beast is really an upscale tabloid with attitude,” Brown said. “I think it definitely needed a face-lift.”