There was a moment in 2015 where it seemed like Politico, the Arlington-based media company founded in 2007 that changed the way politics is covered, might be joining the list of online has-beens of the digital media bubble.
Politico’s demise, it seemed, would come in a particularly explosive way.
“Politico Implodes” read the headline in The Washington Post the morning after most of Politico’s senior leadership, including its CEO and CFO, abruptly announced their departure to form a new company. Weeks and months of speculation followed, wondering what had happened, and what would happen, with what had seemed like a fast-growing success story. Stories of friction between owner and CEO entered the press, as well as rumors of financial issues within the company.
Fast forward six years, and both Politico and that now-5-year-old venture, which landed on the name Axios, are claiming the title of success story for themselves: Politico was sold in October 2021 for $1 billion to become the flagship U.S. publication of German media juggernaut Axel Springer. In January, Axios, with a new round of funding from an array of investors, announced that it would be launching its next phase, Axios Local, which aims to put an Axios newsroom in 100 cities across the U.S.
It doesn’t seem like a moment where one media company would be poised to take over the world, let alone two: Print media has struggled to adapt to the rise of the internet for three decades now, and the bubble has been bursting for digital media for a little less than two.
But it’s not a coincidence that two companies down the street from each other are transforming media.
The story of Politico and Axios is really one success story of a small group of men and women who found a unique DNA—a kind of secret formula that has not weakened but rather strengthened as digital media has fractured. It’s also a breakup story about people who disagreed about how to use that knowledge, and a controversial German suitor who found its way into the breach. But their nearly 20-year frenemy-ship, the way their minds and personalities developed and diverged, would ultimately reshape political media and, if their founders have their respective ways, the way we consume information as a whole.
The Perfect Situation
Robert Allbritton was the young and unproven inheritor of his father’s local broadcast news empire when he founded The Capitol Leader, which would become Politico. His father had attempted to found a rival to The Washington Post, The Washington Star, when Allbritton was a child, but due to media monopoly laws, it was scuttled.
“My first memories of DC were of that newsroom,” says Allbritton. “It was an exciting place for a kid, people yelling and screaming and running around.”
When Albritton took over from his father, his legal counsel found a loophole: As long as they weren’t publishing on a daily schedule, they could own a paper. That meant Capitol Hill publications, which published only when Congress was in session, were in play.
The Arlington tycoon, accustomed to being king of the castle, wanted to aim for the top, even in a saturated DC market. But he found it difficult to lure the best talent away from Washington to his Rosslyn office building: The initial staff was filled with old hands that didn’t match the ambition Allbritton felt.
“We had an octogenarian hand-designing pages,” Allbritton says. “The Golden Girls of newspapers were setting this thing up.”
The night after the former Hill editor he’d hired to run his paper declared to the media that they were aspiring for third place, Allbritton woke up in a cold sweat and told his wife he had to find someone else.
That’s when Allbritton found two men with an idea: John Harris, an established editor at the Post, and Jim VandeHei, boyish and limitlessly ambitious, not unlike Allbritton himself. It was the early years of digital media, and the two star reporters at the Post were chafing at its old-school ideas about being tied to a newsroom and preparing stories to go to print.
The duo was looking for startup money to create a leaner, elite group of reporters who would dominate relationships with sources, creating a constant stream of insider political reporting that would go out to readers digitally and instantly—a kind of nonstop scoop machine that would outpace larger institutions.
Allbritton, with his experience in broadcast news, understood the importance of urgency and outpacing other networks in real time. He also knew that VandeHei and Harris were some of the most connected political journalists in Washington, who would bring with them to Rosslyn the staff and sources his publication needed.
It was Allbritton who needed to do the persuading. He was so taken with their potential that he bluffed that they were ready for a digital-first company, despite the fact that it didn’t have the software system for a functional website.
“I had to convince Jim and John, ‘No, we’ve got people who can do it.’ And I’m sitting here thinking to myself, I hope we can do it. There was some bubblegum and baling wire put around this thing,” Allbritton says of his plan. They made the deal in Thanksgiving and covered the State of the Union in March. “Which is stupidly fast to put together an organization,” Allbritton says.
At first, Allbritton thought Politico would bring in a small side profit to his network news business. But Politico got an instant response in terms of visibility, web traffic, and impact on the industry. It instituted a kind of superstar model of journalism, where big-personality reporters like Mike Allen, a former Time reporter infamous for hoarding documents until the pile lifted his office chair from the ground, gained exclusive access to sources and then divulged info through chatty newsletters.
Key to Politico’s success was that its revenue is only partly based on advertising. A bulk of the profit comes from selling Politico’s insider information to companies and influential figures—congresspeople and their staff—who pay exorbitant prices to access paywalled sections of the site, called Politico Pro. It’s a model built for Washington, where information makes the town hum.
That fusion of journalism and profit reflected VandeHei and Harris’ unusual willingness to think about information as a product. They would leave the newsroom to shoot around moneymaking ideas with Allbritton, something that was verboten in more traditional companies.
Allbritton points out that, on his side as owner, he was always willing to spend to support Politico’s brand as a new model of journalism—he understood that upending political journalism was good from a marketing perspective.
In the first few years, he says, he never said no to the pair, to the point where they felt comfortable coming into his office and banging their fists on the table to ask for more money.
“I remember one day I was walking out for the day, and Jim and John were walking the other way,” Allbritton says. “Jim kinda yells back and says, ‘Hey, boss—thanks for letting us spend all your money!’” It wasn’t just money; it was control over the vision for the company. VandeHei was promoted from editor to CEO just a few years into the company’s lifespan.
That’s also when paths started to part ways, where the seeds of the companies Axios and a very different, global Politico were sown.
Allbritton ceded control to VandeHei in the U.S. and traveled to Europe. To continue to grow, Politico needed more spaces like DC, where information is money. He thought he’d found it in Brussels: the capital of the European Union and a city that, in Allbritton’s words, had a reputation as a spot where journalists were put out to pasture.
“It just wasn’t seen as sexy. From a European standard, it’s a very boring city to live in. The weather’s awful; nothing happens there,” Allbritton says.
That actually represented opportunity to Allbritton. They had a chance to move into a relatively under-covered but massive bureaucracy with complex conversation channels to navigate. “I said, ‘You’ve got a lot of power here, you have a lot of money, and you definitely have personalities. If you got those three things, you have the sources of great journalism, and you have the sources of business.’”
There was a limit, however, to how much you could make journalists focus on profit potential, according to Allbritton. He took Allen, VandeHei, and Harris on an exploratory trip to Europe. European bureaucrats bored them. On the way back from Brussels, Allen, riding in the car next to VandeHei, told him to shoot him before he ever assigned him there.
Instead of relying on his American crew, Allbritton looked for a new partner, and this time, he had the clout to pick the best. The Germans were the most powerful country in the E.U., and Axel Springer was one of the most powerful media companies in Germany. Together, they co-founded Politico Europe, a deal that Allbritton had to initially somewhat sneak past VandeHarris, as the pair had come to be called internally.
“I sort of told Jim and John how it was progressing but didn’t fully,” Allbritton says. “They probably weren’t very enthusiastic about it, so there was gonna be a lot of foot-dragging.”
Back in the U.S., VandeHei was occupied with a rapid expansion of the original company. A senior official within Politico says VandeHei continued launching idea after idea, without enough concern for long-term profitability. The company was prominent and was selling its product successfully, and yet it was still losing large amounts of money.
VandeHei hired Roy Schwartz, future co-founder of Axios, as CFO, the two bonding over a shared love of big ideas, and together with Allen, a new vision for the company emerged. VandeHei planned a national Politico, one that would move beyond its Washington insider audience.
“Our dream is a Politico journalistic presence in every capital of every state and country of consequence by 2020,” VandeHei wrote in an internal memo in 2015.
That concept stressed some in Politico, who felt the B2B model wouldn’t play as well in Peoria, for instance, due to a lack of centralized data flow.
In Allbritton’s opinion, Politico U.S. should have been emerging from its infantile stages by now. Instead, VandeHei wanted more cash to fuel the expansion—more than even Allbritton, who by now had gone all in on Politico by selling his TV stations, seemed to be able to provide.
Reports filtered out that VandeHei instead turned to Axel Springer, who had become interested in a Politico sale, making regular offers to Allbritton. VandeHei reportedly saw in them a new source of cash flow, but Allbritton wasn’t ready to part with the company.
As they experienced pushback, there was a sense between VandeHei and Schwartz that they had built a company, but they didn’t have control over it.
“We built that company, but we didn’t own the company,” Schwartz says. “I think ownership was a really important thing, being able to control our own destinies.”
Allbritton himself notes that by then, he and Harris were far more engaged with Politico Europe, which he says felt like getting back to the fun, early “garage band” days of Politico.
“Europe was back in that startup phase; you’re rewinding the clock. And so there’s that certain level of passion and energy and enthusiasm and excitement,” Allbritton says. “When it’s like, Oh, it’s the third presidential debate, it’s just not quite the same.”
VandeHei, Schwartz, Allen, and other senior leadership made the decision to leave in 2015. In a moment, Politico U.S. was gutted—and would reform as a new company, as yet unnamed.
When they announced their departure, Allbritton issued a statement that said the one thing he couldn’t give VandeHei was ownership. But he didn’t mean simply stakes—he was also talking about direction.
“You couldn’t run it like an entourage startup anymore. It was just too big. It was going to collapse under its own weight, unless you put in a solid foundation on this house,” Allbritton says. “Quite frankly, that’s probably what triggered the departure, you know, because Jim really wanted to run his own ship. And I said that when he left—the guy wants to run his own company. I can’t do that. I can’t make it his company.”
The Race to Sell
According to Schwartz, he, VandeHei, and Allen were studying the data. And they were finding that, in a fast-moving, digital age, the 5-year-old Politico was already too traditional.
Schwartz and the team saw that most people were consuming news on mobile, often only reading the first page, 250 words or so, before dropping off—if they even got that far. Many readers were sharing posts without actually reading them.
So Axios took Politico’s insider immediacy up the street to an office building in Clarendon, drew up on a whiteboard what an Axios article would look like on a phone screen, and started throwing around ideas. They ended up replacing long articles with bulleted lists generally no more than 300 words long, with estimated reading times and bolded keywords.
They paired the format with Allen’s tendency to privilege scoops above all else, so that an Axios article could feel like an internal memo leaking confidential information as much as journalism—an approach they actually trademarked as “smart brevity,” which they now sell to companies looking to make internal communications more efficient.
In 2016, they excelled, landing a Trump interview on day one, which evolved into exclusive reports from within the Trump organization, and eventual Trump White House, through now-famed reporters like Jonathan Swan. Investors and advertisers lined up.
It immediately had an outsize impact on the way media approached their product, according to Nick Johnston, original editor, now publisher.
“I mean, come on. If you look at newsletter overhauls that legacy media publications do, they do it to make their newsletters more like ours,” Johnston says.
The dream of news in every major city was renewed, and Axios reportedly looked again to Axel Springer as a potential source of funding. Reports of negotiations between the two filled the media press.
Politico Lightens Up
When Northern Virginia magazine pointed out that Politico went through a little bit of a rebuild in 2015, Allbritton cracked up.
“A little bit? Holy cow! You’re putting it nicely,” Allbritton says. “It was pretty bad there for a little bit.”
Allbritton regrouped and realized that Politico under VandeHei had built a strong brand—what they could do now was build a valuable company. He and Harris turned their focus from Europe back on the original.
Politico had grown so rapidly that it didn’t have a marketing department, an HR department, or much in the way of a finance department. The editorial culture was infamously competitive and grinding, a culture that Allbritton describes as a “locker room” under VandeHei. He brought in his editor from Politico Europe to make it a place where journalists might want to stay.
“It was time for a stylistic shift,” Allbritton says.
It’s “unsexy,” he acknowledges, but what had been the company’s bleakest hour quickly turned into a success story. New star journalists replaced Mike Allen and his newsletter: Jake Sherman and Anna Palmer had such success they subsequently spun off their own newsletter-based company, Punchbowl News.
With reports in the media of an imminent Axios sale, Politico flipped the script. Allbritton set a goal of a billion-dollar valuation. When he texted Mathias Döpfner, owner of Axel Springer, to see if he was still interested in a buyout, the response was “Ja.”
In one sense, Allbritton’s version of Politico had won out against VandeHei, Schwartz, and Allen’s version of Politico. When asked why he had chosen to purchase Politico and cease pursuit of Axios, Döpfner said he wanted to purchase the top company.
“If you can be the shareholder of the champion in this field, there is no need to do anything else,” Döpfner told Politico employees.
The success does not come without caveats. Politico unionized in the face of the Axel Springer sale, and the Axel Springer sale caused controversy over the fact that the company requires journalists to sign a pledge supporting Israel’s existence.
Axel Springer dropped the pledge requirement for Politico employees after a backlash. A broader question about editorial independence isn’t as threatening for Allbritton.
“They said, ‘Look, we would hope that a publication would go along with the ideas that form those ideals,’” Allbritton says. “Which is essentially freedom of speech, being pro-democracy—not so much on the Israeli thing.”
Allbritton, who initially opposed the unionization, says he’s sticking around to monitor the state of the company, telling Döpfner he’ll give him a heads-up if something’s wrong.
“He kind of looked me in the eyes and asked, ‘You promise you’ll call me if something’s wrong?’ That’s the role that I see for myself,” Allbritton says. “This thing will be on my gravestone.”
It’s a legacy he shares with VandeHei, Harris, Schwartz, and other foundational figures: a change in modern media, focused on personal insight delivered through more efficient tech, and style, born out of that initial human chemistry.
“I think the secret is having the right people at the right time together and working together in the right ways,” Allbritton says. “We had that for a long time, a lot longer than most, and it was a lot of fun. You know, it was just a hell of a lot of fun.”