When Nicholas Kristof of the New York Times starting asking questions about Goldman Sachs’s partial ownership of Village Voice Media, the investment firm got nervous. Village Voice Media, parent company of the LA Weekly, also owns Backpage.com, a site that’s taken some heat for running “escort ads” selling trafficked women and children. By Friday, Goldman Sachs had sold its 16% stake in the company.
And that, as Yosemite Sam would say, makes them lily-livered cowards.
If Goldman Sachs gave a damn about victims of sex trafficking, they would have used their 16% influence to shut down the adult services ads. Instead, the firm just attempted to cover their own ass by selling as fast as they could.
As Kristof himself noted, Goldman Sachs owned a significant chunk of the company for over six years, and served on the board for four. He writes, “There’s no indication that Goldman or anyone else ever used its ownership to urge Village Voice Media to drop escort ads or verify ages. Elizabeth L. McDougall, chief counsel for Village Voice Media, told me Friday that she was “unaware of any dissent” from owners.”
And why would owners object? The adult services section of Backpage.com takes in approximately $25 million a year. Goldman Sachs pocketed their blood money, then ducked out to avoid bad press.
To be fair, escort ads are not the exclusive property of Village Voice Media. Plenty of newspaper companies run them, and most of them are likely placed by consenting adults. But sex traffickers are selling victims through these ads, and the problem is bigger than VVM newspapers would have you believe.
VVM is taking most of the heat simply because they own the lion’s share of the market. The AIM Group estimates that 70% of escort ads in the U.S. are on Backpage.com. And that’s not even counting the ads that run in VVM-owned newspapers like the LA Weekly.
Village Voice Media has yet to issue a response to Kristof’s column or the Goldman Sachs dump. But they usually have something to say about bad press, so it’s probably coming.