Publishers and staff owed $1.5m by failed Inception Digital with Mark Carnegie only secured creditor
Failed sales house Inception Digital owed more than $1.5m when it went into administration, with around a dozen local and international publishers set to lose out on hundreds of thousands of dollars in advertiser fees.
At a creditors meeting yesterday it was revealed that only multi-millionaire investor and former director of the company Mark Carnegie and the Australian Tax Office will get funds from the company, leaving publishers including Mashable, The Urban List, The New Daily and AOL hundreds of thousands of dollars out of pocket.
Mashable is owed $529,239 by its former sales house, The Urban List $79,725, AOL $67,622 and The New Daily $54,067. Celebrity chef Adam Liaw is also listed as a creditor.
Mashable is owed more than $500,000 by Inception Digital
Inception Digital acted as a sales rep for dozens of smaller publishers with large media agencies, collecting ad fees from them and taking a percentage as its fee. It is understood it had recently agreed a deal to represent the New York Times in Australia.
However it was unexpectedly placed in voluntary administrations in mid-May after a series of large clients including The Guardian and Mashable pulled out from their representation in market.
The company was founded by current head of digital for the NRL Rebekah Horne and managing director Jade Harley in 2011, with serial investor Mark Carnegie putting in around $1m.
Creditor documents obtained by Mumbrella reveal that while the decision to put the company into voluntary administration was made on May 13, the administration was not completed until May 16. Mumbrella understands Inception collected agency fees on the 15th of each month, but does not allege any wrongdoing.
The documents show when it went into administration the company had $560,468 cash in the bank, and was owed nearly $754,000 by creditors.
Largest shareholder: Mark Carnegie
However Mumbrella understands at yesterday’s creditors meeting it was revealed only Carnegie would be seeing his money, with his company Carnegie Venture Capital laying claim to a $918,879 charge over Inception as the only secured creditor. However he will lose $88,957 that was unsecured.
Founders Horne and Harley are $11,000 and $38,400 out of pocket respectively. Calls to Horne and Harley were not returned at the time of publication, while Carnegie hung up.
It is also unclear whether 22 staff of the company and subsidiary Oyster magazine will be paid their full entitlements, with each listed as employee creditors. Several freelancers are also amongst the unsecured creditor list.
Other international publishers owed money include Fast Company, with $10,390 outstanding, and US-based lifestyle publisher Glam Media, now known as Mode Media, owed $159,021.
Locally a number of smaller publishers have also been hit. Boss Hunting, a men’s lifestyle publisher is owed $4,785 while Daily Addict, a guide to what’s on in Sydney and Melbourne, had an outstanding payment of $2,970 and Robyn Foyster’s The Carousel is owed $1,995.
Custom publisher Rolling Youth (Stab) will lose $27,500 and South Australian-based digital mummy magazine publisher Mum’s Media Group has an outstanding payment of $6,809.
Getty Images is owed $1,485, web platform provider Webstar has $28,810 payable, content marketing platform Stackla is left with $4,400 unpaid.
Creditor: Celebrity chef Adam Liaw
Amongst the long-tail of unsecured creditors are a collection of photographers, influencers, stylists and model agencies, as well as a $5,000 Commonwealth Bank credit card debt, and $890 owed to chef Adam Liaw.
Inception “merged” with fashion and lifestyle magazine Oyster in May 2014. It is unclear whether Oyster has also been liquidated, however the magazine is continuing to post content to its website and has yet to respond to attempts to contact it from Mumbrella.
Updated 2.40pm: An earlier version of this article said a digital agency called Protein was owed $14,668. Protein has since contacted Mumbrella to say it had never dealt with Inception Digital and was not owed any money by the company, and the body of the article has been amended to reflect this.
Miranda Ward worked for Mumbrella from 2013 to 2017, eventually becoming deputy editor. Miranda joined Mumbrella in September 2013 from Sky News.
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The financials seem like they could of made it worked? Sad that Carnegie is the only one that will get his money.
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Why is this information being divulged? Is it constructive? Is it balanced editorial with the financial gain made by the publishers mentioned? Why didn’t we see this level of detail around Brand New Media’s demise? Why?
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Hi Why,
Thanks for the comment.
We can’t know how much Inception made for each of its publishing partners, only how much money it claimed from advertisers in the name of those publishers for ad campaigns which have run, but they will never see. Is that fair, for an industry already on a knife edge and many publishers losing money already? Or should the whole situation just be whitewashed?
In terms of BNM we’d have published a similar list had we had access to that information.
We’ve tried repeatedly to contact the owners and operators, none of them has responded which is a shame as we’d love to give their side of the story.
Cheers,
Alex – editor, Mumbrella
In terms of why this level of detail wasn’t divulge