Politics | Recovery | Current Obsessions

Let’s set Substack’s “Nazi problem” aside for a moment. What if the bigger issue is being stranded on a collapsing platform... with a bunch of Nazis? Substack's content woes are bound up with its shaky business model in ways that are bad for all of us.

It's Substacks All the Way Down

Last week, Terry Moran announced that he’d be the latest high-profile journalist to take his brand to Substack, following his dismissal from ABC due to having the correct opinion of Stephen Miller. His Real Patriotism now has over 113k subscribers and about a dozen posts.

Puck’s Dylan Byers took the occasion to pull in some reporting by Substacker Eric Newcomer (100k subscribers, claiming revenue of $2M a year, profit of over $1M) about the platform itself, currently in the process of seeking another round of financing. Newcomer framed his gossip about the new round with some fist-pumping at “Trump II” putting Substack “back in the zeitgeist.” Byers asked the reasonable question: If Substack is turning out to be a place of refuge for journalists in the new age of authoritarianism, how sturdy is that refuge?

Now, Substack has also become a mechanism for legacy publications, including The New Republic (where I am a contributing editor), to get in on the newsletter boom. According to Substack, The Washington Post is in talks to move their writers there as well. This burnishes Substack's credibility as a journalism destination and makes Byers' question even more urgent. Again, can this young company handle the weight being thrown upon it? Is it up to the challenge of saving journalism in a robust form?

Byers frames it for Puck’s mostly media-industry readership like this:

Those who have the savvy and stamina to build real businesses that they can migrate elsewhere [after Substack falls] will be in luck. Those who treat the platform as a place to publish the occasional hot take and host video chats with an all-too-familiar cast of fellow green-room denizens almost certainly will not.

My take is more dire, because I’m not sure about “savvy and stamina” as the distinguishing characteristics of those who might be able to migrate elsewhere. I think plenty of smart folks might find themselves stuck.

Substack is rickety. It’s as unstable as a SpaceX launch, as overpromised as a Stephen Miller marriage.

Substack does not have a clear future as a newsletter business, I'm not the first to notice that. But it doesn’t have to fail outright to be a disaster. It just has to keep trying to become a life-sized map of the internet: maximum content, maximum churn. The center cannot hold—especially not for newsletters, a format that depends on intimacy and long-standing trust.

The Substack bust will not just take out a few hot-take merchants and media dilettantes. It’s going to take down a lot of working journalists who’ve built modest, sustainable incomes as well as the fragile public sphere we’ve been piecing together in the ashes of Twitter and the twilight of traditional journalism.

Let’s Run the Numbers

The company had a fairly flashy first time out raising capital in 2021, but has struggled since then.

A timeline of their fundraising:

2019 and before

• Raised $20M, valued at $48M (TechCrunch)

2021

• Raised $65M in venture capital on a $650M post-money valuation (Axios), with another $20M in follow-on rounds

2022

• Attempted to raise $75–100M; rumored valuation: up to $1B. Talks fell apart as the market “cooled” (NYT)

2023

• Asked users to invest via WeFunder
• Goal: $2M. Pledged: $7.8M — which is more impressive if you don’t know that WeFunder caps investments at $5M.

2024

• “Quietly” raised $10M (Axios)
• Backers included Omeed Malik, head of “anti-ESG” VC firm 1789 Capital—where Don Jr. now works! He also backed Tucker Carlson’s departure from Fox. (Yahoo Finance)

2025

• Newcomer says Substack is “pitching investors on a round between $50M and $100M that would value it above its roughly $700M last round price.”(“Roughly” doing about $50M of work in that sentence.)

A timeline of their profitability:

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There are a lot of red flags in that short history, including that pretty steep drop-off from a rumored 10-figure valuation in 2022 to handing around the hat at the office in 2023. Malik’s interest is an even brighter warning flare.

According to Newcomer, Substack is bringing in about $45M in "annualized revenue"—or their 10 percent cut of the $450M subscribers pay Substack authors. As Byers points out, a $700M valuation would demand Substack’s founders convince investors of a 16x multiple: the kind of math that makes sense for a software company but not a media company. ^*

The Everything App!

Everything suspect about Substack stems from a desire to be more like a sticky destination and less like a publisher. You can ignore their posturing about free speech and just look at how they’re leaning harder and harder into audience capture and engagement. They’re offering audio, video, short-form posts, “discoverability.” They want to keep readers in their app listening, watching, interacting—anything but reading newsletters in their inbox as God intended.

Indeed, Substack is now hunting bigger game than any legacy media creature. In January, they announced a $20M “creator accelerator fund” to lure Tiktokers (or anyone else with at least $2000/mo in existing subscribers). That’s almost half their revenue on a bet that gets them further and further away from a sanctuary for outcycled journalists and closer and closer to the chaos chum bucket that newsletters were supposed to stand out from.

And if Substack does manage to raise that $100M they’re looking for now? Things will get worse.

The pressure to grow will increase. So will the incentives to double down on the kind of polarizing, high-engagement content that gets attention even if it poisons the well.

In this potential future, does Substack stake someone like Terry Moran? How many Terry Morans does Substack have room for? Is there even a public appetite for a dozen Terry Morans, each independently Terry Moran-ing in his own newsletter? How much is a Terry Moran worth to Substack? Less than he used to be. Less than they want you to think.

Terry Moran may not be everyone’s idea of a canary in the coal mine but that’s kind of the point. ^*

Right now, Substack is independent of the political pressures that might have pushed ABC to let Terry Moran go. But it’s utterly dependent on the whims of its investors. Every round of capital deepens the expectation of a big payoff. Substack doesn’t need to be sustainable to survive. It just needs to be buyable.

Say Substack as a newsletter platform limps along long enough for its founders to get desperate. Then someone with deep pockets—someone interested in culture war influence—decides it has value as a personal ideological playpen. Elon Musk expressed interest in buying the company in 2023. Malik has already invested. Imagine the enshittification of Twitter, but with thousands of journalists locked in because that’s how they hoped to make a living, not just fuck around micro-blogging on company time.

It’s the Twitter-to-X pipeline reimagined for writers, with income handcuffs. Those of us who left Twitter when Elon took over did so without leaving money on the table. There was no investment or expectation. With Substack, leaving might mean missing a mortgage payment.

The problem isn’t just that Substack makes money off Nazis, it’s that they don’t seem to care who they make it from.

Substack is still the easiest option for creating a newsletter, especially for creators without the time, tools, or tech fluency to self-host. You can't make something really beautiful, but it's hard to fuck it up.

I've had conversations with editors at some of the largest news and politics Substack newsletters—all have expressed frustration with the platform and a desire to leave, but feel constrained by the lack of infrastructure or certainty offered by other options. Ideally, I would put all those folks on an email chain and they’d orchestrate an exit together. (Congrats to me for inventing the magazine!)

For now, I don’t judge them for staying put. I’m most hopeful about reaching those who have a choice right now—people just starting their newsletters, or whose Substack isn’t their primary source of income. The ones who default to Substack. The market for alternatives will expand with demand. Make some demand.

And yes, I say all this as someone who was offered a spot in Substack’s invite-only pro program back in 2019—and turned it down, mostly out of fear of betting on myself. I started on my own last year and left not because I was making a ton of money or had the runway to invest in my own stack, but because I had just enough bandwidth to make the leap. I don’t regret leaving. But I do wish more of us had options—and support—for doing the same.

But a different newsletter platform isn’t all I want, because newsletters aren’t the answer to a disintegrating media ecosphere. We need a world where a social safety net protects risky writing. The idea that we can hustle our way to safety will only push us closer to collapse. We don’t need better tools as much as we need each other.

Until then: thanks for reading, and please consider upgrading to a paid subscription if you can.

On revenue: In 2021, Substack made $11M from subscriptions and spent $16M on “partnership expenses”—mostly advances to big-name writers. That’s a net revenue of -$5M. They may have put an end to that kind of spending on writers but their announced $20M in TikTok stars suggests they're still thinking of the platform as The Platform.

On Terry Moran: He has been pleasant every time I've happened to run into him; he seems nice. But I think he's still a good example for what Substack can and cannot be. UPDATE: I have reporting as to whether Substack offered Moran a deal; I suspect they did because Moran leapt so immediately to the platform and he's enough of a name that I think he could have had options if he'd wanted them.