Byron Allen to Buy BuzzFeed In $120 Million Deal, Will Take Over As CEO
Insert your own BuzzFeed emojis here for this surprise deal.
After running into a cash crunch as a publicly traded company, BuzzFeed has found a buyer in Byron Allen, the Comics Unleashed CBS late-night host and mogul behind some assets of The Weather Channel, as well as a patchwork collection of syndicated shows, channels and 13 broadcast affiliate TV stations that comprise his Allen Media Group.
In a $120 million agreement, Allen will take a 52 percent majority stake in the company as well as the CEO role from founder Jonah Peretti, funded by $20 million in cash and $100 million in the form of a promissory note due five years after deal close, which is expected in May. The move was revealed as BuzzFeed reported quarterly earnings that included a nearly 20 percent decline in advertising revenue year-over-year. The company’s net loss for the quarter was $15.1 million, up from $12.5 million last year.
In addition to the deal with Allen, Peretti has signaled that there will be more cost cuts at BuzzFeed as well as the spinoff of its studios division and food brand Tasty into a separate entity. A move like this could be a precursor to a potential sell off of that division to another interested suitor on the hunt for a unit that once was at the forefront of viral cooking and food videos.
The sale for just $20 million upfront marks a dramatic fall from where BuzzFeed stood at its height of cultural relevance, when Peretti had reportedly turned down a $650 million offer from Disney. (“We were crazy not to sell the company in 2014,” former BuzzFeed News editor-in-chief Ben Smith has said.) At that time, BuzzFeed had surfed the waves of Mark Zuckerberg’s decision to send millions of readers from Facebook outside of the platform to news sites.
The company led a flotilla of Millennial news brands — Mashable, Mic and Vice News among them — that built their business upon the idea that they could create viral digital content and distribute it through links from Facebook and Twitter. Zuckerberg, and other tech titans like Twitter/X owner Elon Musk, soon realized it was more advantageous to keep users engaged on their own platforms. Multiple media companies were a casualty of the pivot.
While those companies folded (Mic) or were sold off (Mashable) or live on in a totally different form (Vice), BuzzFeed was large enough to IPO in 2021 (the same year it bought HuffPost from Verizon in order to scale up its business), though it languished on the Nasdaq ever since. It shuttered its once-formidable news operation BuzzFeed News two years later and since has been weighing the sale of its assets, including Tasty.
BuzzFeed’s listicles, quizzes, memes and content mix was built for an era where users found links on social media, then shared them on their own accounts to followers. In a TikTok and Instagram era fueled by personalized algorithms and endless video clips, that model is now far less effective. BuzzFeed’s flagship site reached about 33 million unique visitors in April, down year-over-year, per Comscore. That number is also far smaller than scaled national newspapers like USA Today (nearly 50 million) or celebrity glossies like People (more than 65 million). In its next era, BuzzFeed may choose to bet in the video streaming space.
For Allen, taking over BuzzFeed at a bargain price follows a playbook that he’s been operating on for years, including picking up The Weather Channel’s linear TV brand in 2018 (its digital operation and data-driven apps are owned by a private equity firm) and buying and flipping local television stations. Most recently, Allen paid CBS in order to take over Stephen Colbert’s The Late Show time slot and replace it with his Comics Unleashed variety series.
With Allen claiming the BuzzFeed chairman role, Peretti seems to be moving back to experimental content mode. His next step will be to oversee a division titled BuzzFeed AI in order to take, as he describes it, a “hands-on role developing products and technology that are only possible because of recent advances in AI.”
“Byron Allen has built one of the world’s largest media companies and is one of the most accomplished media entrepreneurs in the industry, having spent 30-plus years transforming distribution infrastructure, identifying strategic assets, and scaling them into something much greater,” stated Peretti. “Byron’s vision, operational experience, and long-term commitment to premium content makes him exceptionally well-positioned to lead BuzzFeed and HuffPost into our next phase of growth. And personally, I’m thrilled Byron is taking over The Late Show With Stephen Colbert time slot, and highly confident that his relationships with talent will bring some incredible stars to the BuzzFeed platform.”
Added Allen, “Jonah is a great visionary and has done a phenomenal job. BuzzFeed and HuffPost have become two iconic global digital media brands with powerful audience reach and strong cultural importance. Our vision is to build on the iconic foundation of BuzzFeed and HuffPost by expanding into free-streaming video, audio and user-generated content. As of this moment, with the power of AI, BuzzFeed is officially chasing YouTube to become another premiere free video streaming service.”
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