On a bright October morning, Joanna Coles, in a chic tomato-red coat, and Ben Sherwood, dressed more conservatively in a corduroy jacket, met at their usual spot, the no-frills Star on 18 diner on Manhattan’s Far West Side.

The two seasoned media executives discussed their ambitious plans for The Daily Beast, the 16-year-old news site that has struggled financially, in which they acquired a minority stake this past April.

While they were optimistic about the mission they’d undertaken, including early signs of audience growth and an increase in subscribers, Ms. Coles, former chief content officer of Hearst Magazines, and Mr. Sherwood, ex-president of ABC News and Disney TV, also expressed some frustrations.

Frustration arose from not being welcomed by the existing team as warmly as they had hoped. Frustration that the site’s tech glitches forced them to purchase multiple subscriptions just to access it. Frustration at the uphill struggle to convince the newsroom of their editorial vision.

Less than three weeks after their takeover, New York Magazine published a detailed report on tensions between reporters and Ms. Coles over some of her story ideas. These included an investigation into whether former President Donald J. Trump was experiencing stress-induced flatulence during his criminal trial and a list ranking the most obese Congress members. (Neither story ran.)

It was evident that the sources for the report were internal, with one staff member harshly criticizing the new owners’ “warped vision” for the news site.

“This was close to being sold off to private equity, where it would have been stripped,” Ms. Coles later said in an interview at The Beast’s Chelsea office. “How does it help to tape our conversations and boast that you won’t even consider the stories your new bosses ask you to explore?”

“No wonder this place was about to go out of business,” she added.

Mr. Sherwood was equally shocked by anonymous complaints from Beast journalists about a Daily Beast article on Barron Trump, Mr. Trump’s youngest son, attending NYU. The piece, based on a source from Ms. Coles, went out without a byline.

“Joanna’s source was rock solid,” Mr. Sherwood explained. “The newsroom spiraled over it because she didn’t disclose her source, and no one could confirm it themselves.”

Yet, he pointed out, “Where is Barron Trump at school now?” Indeed, Barron was seen on NYU’s campus for the start of the school year, and Mr. Sherwood later wrote an article confirming the April scoop.

Giving It ‘One Last Shot’

The Daily Beast, founded in 2008 by magazine editor Tina Brown with backing from Barry Diller’s IAC, developed a reputation for its cheeky, aggressive reporting, especially on politics and national security. Despite its small newsroom, it has published impactful scoops, like its reports on Republican Senate candidate Herschel Walker and the arrest of sex trafficker Jeffrey Epstein.

Named after the fictional newspaper in Evelyn Waugh’s Scoop, The Daily Beast helped launch writers like Taylor Lorenz, Jamelle Bouie, and Molly Jong-Fast. When Ms. Brown began the site, her editorial vision mixed “high-low” stories.

“The Daily Beast at its peak was mischievous, subversive, and totally committed to breaking major stories,” said Noah Shachtman, its editor from 2018 to 2021. “Look at previous election cycles, and The Beast had a significant impact.”

But financial losses persisted, and audience numbers declined in the last two years.

Fed up with losses, Mr. Diller had tried to sell The Beast. He considered a deal with The Ankler, then explored a sale to a private-equity publisher before forming a partnership with Mr. Sherwood and Ms. Coles.

“It was about to be sold,” Mr. Diller said in an interview. But after meeting Mr. Sherwood and Ms. Coles, he believed in their vision.

“I wanted to give it one last chance,” he said. “It’s still early, but I’m glad we took this step.”

Mr. Sherwood, 60, and Ms. Coles, 62, were jointly granted a 49 percent stake in the company, placing them back in the media world. (No financial details were disclosed; IAC still has majority control.)

At first glance, they seem an unlikely pair. Ms. Coles is a glamorous British editor famous for her time at Cosmopolitan. Mr. Sherwood, a Harvard-educated Rhodes scholar, made Good Morning America the top morning news show before overseeing Disney’s TV division.

They became friends in 2013 when Mr. Sherwood, moved by a speech Ms. Coles gave, reached out. From there, they bonded over their shared passion for the news.

“We’d send each other stories the other might have missed,” Ms. Coles shared. “His reading breadth amazes me, and he has a rare sense of humor.”

The pair had considered working on a journalism project after Ms. Coles left Hearst in 2018 and Mr. Sherwood left Disney in 2019, but nothing materialized. Since then, Mr. Sherwood launched and sold Mojo, a youth sports startup, while Ms. Coles produced The Bold Type, led a blank-check company, and served on Snap and Sonos boards.

Returning to a newsroom was thrilling for both, especially one with a brand built by editors like Ms. Brown, John Avlon, and Tracy Connor. But Ms. Coles and Mr. Sherwood immediately faced a media landscape transformed by closures, bankruptcies, and layoffs across the industry.

The Beast was set to lose $10 million this year, Mr. Sherwood said, with five consecutive quarters of losses before their April deal.

“We weren’t on a viable path,” Mr. Sherwood said.

When they first met with The Daily Beast’s staff, they hoped the newsroom would be relieved to have experienced media executives committed to reviving it.

However, staff members perceived the pair differently. According to several current and former employees, Mr. Sherwood and Ms. Coles came across as highly critical and aggressive regarding The Beast’s state and the work its team was producing.

Ms. Coles, now chief creative and content officer, emphasized a desire for more “funny” content and vowed to “flood the zone.” Mr. Sherwood, as publisher and CEO, voiced frustration over tech issues plaguing the site’s paywall and payment system.

In the weeks following, Ms. Coles proposed several story ideas that rankled many reporters, such as hiring a “Lauren Sánchez correspondent” to cover Jeff Bezos’s fiancée.

Reporters started leaving, including Washington bureau chief Matt Fuller, followed by other political reporters. Editor in chief Tracy Connor was replaced by Hugh Dougherty from The New York Post. Sherwood and Coles also announced voluntary buyouts, aiming to cut costs by $1.5 million. By July, The Beast’s headcount was down by 35 percent through buyouts and a few layoffs.

A New Focus: Wealth and Power

Ms. Coles envisions The Beast producing shorter, sharper stories on power, politics, and pop culture, infused with satire to lighten the mood. She’s drawn to the extremes of wealth and power and highlighted recent stories on A-list celebrities supporting Sean Combs and controversies surrounding Will Lewis, CEO of The Washington Post.

“I wanted news that wasn’t always about the end of democracy,” she said.

She acknowledged the website had some strong editors over the years but felt its media relevance had diminished.

“I wasn’t reading it regularly,” she admitted. An editor she knew had once referred to it as “the boring avatar of the resistance.”

Ms. Coles is striving to inspire ideas and revive the newsroom’s culture, which she believes has suffered from remote work. Beast employees now work in-office four days a week.

“We have some great people here who are excited by the mission,” she said.

But others she found less favorable. She noted that a political reporter hadn’t called in on the Sunday of President Biden’s withdrawal from the race or after the attempt on Mr. Trump’s life in Butler, PA.

Ms. Coles had turned her Hamptons dining room into an ad hoc newsroom that day, hosting Emma Tucker, editor in chief of The Wall Street Journal.

“It was madness that a political correspondent wouldn’t cover such a story immediately,” she said. Former Beast reporter Jake Lahut, who has since left, cited his articles filed on Biden’s exit and clarified he was out of the country during the assassination attempt but had notified the Beast’s weekend desk.

“There’s been a waterfall of news,” as Ms. Coles put it, leading up to November’s election. Yet, the Washington bureau now has just two reporters on staff.

“They saved us, but to what end?” asked one former Beast reporter.