Enter your BuzzFeed emoji here to get this surprise deal.
After facing a cash crunch as a publicly traded company, BuzzFeed found a buyer in Byron Allen, a publicly traded company. Comics unleashed The CBS late-night host and mogul behind some of the Weather Channel’s assets, as well as the patchwork of syndicated shows and channels and 13 broadcast television stations that make up his Allen Media Group.
Under the $120 million deal, Allen will receive a 52% majority stake in the company as well as the CEO role from founder Jonah Peretti, with financing of $20 million in cash and $100 million in a promissory note due five years after the deal closes, expected in May. The move was revealed when BuzzFeed reported quarterly earnings that included a nearly 20 percent decline in advertising revenue year-over-year.
In addition to the deal with Allen, Peretti noted there will be further cost cuts at BuzzFeed as well as splitting its studio division and food brand Tasty into a separate entity. A move like this could be a precursor to a potential sale of that division to another interested suitor looking for a unit that was once at the forefront of viral cooking and food videos.
The sale for just $20 million up front represents a significant drop from where BuzzFeed was at the height of its cultural relevance, when Peretti reportedly turned down a $650 million offer from Disney. (“We were crazy not to sell the company in 2014,” said Ben Smith, former BuzzFeed News editor-in-chief.) At the time, BuzzFeed was surfing the waves of Mark Zuckerberg’s decision to send millions of Facebook readers off the platform and onto news sites.
The company led a fleet of millennial news brands — among them Mashable, Mic and Vice News — that built its business on the idea that it could create viral digital content and distribute it through links from Facebook and Twitter. Zuckerberg and other tech giants like Twitter/X owner Elon Musk quickly realized that it would benefit them to keep users engaged on the same platforms. Multiple media companies were victims of this axis.
While these companies have folded (Mic), been sold (Mashable), or continued in a completely different form (Vice), BuzzFeed was big enough to have an IPO in 2021 (the same year it bought HuffPost from Verizon in order to expand its business), though it has languished on the Nasdaq since then. It shuttered its once formidable news operation BuzzFeed News after two years, and has since been considering selling its assets, including Tasty.
BuzzFeed’s listicles, quizzes, memes, and content mixes were created for an era in which users found links on social media, then shared them on their own accounts with followers. And in the age of TikTok and Instagram fueled by personalized algorithms and endless videos, this model is now far less effective. BuzzFeed’s main site reached about 33 million unique visitors in April, down year over year, according to Comscore. This number is also much lower than national broadsheet newspapers such as USA Today (nearly 50 million) or as shiny as a celebrity the people (More than 65 million). In its next era, BuzzFeed may choose to bet on streaming video.
For Allen, acquiring BuzzFeed at a bargain price follows a playbook he’s been working on for years, including acquiring 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 TV stations. Most recently, Allen pushed for CBS to acquire Stephen Colbert’s company Late Show time slot and replace it Comics unleashed Various series.
With Allen taking over as president of BuzzFeed, Peretti appears to be returning to experimental content mode. His next step will be to oversee a division called BuzzFeed AI in order to play, as he describes it, “a hands-on role in developing products and technology that are only possible because of recent advances in artificial intelligence.”
“Byron Allen has built one of the largest media companies in the world and is one of the most accomplished media entrepreneurs in the industry, having spent more than 30 years transforming distribution infrastructure, identifying strategic assets, and scaling it into something much greater,” said Peretti. “Byron’s vision, operational experience, and long-term commitment to outstanding content make him extremely well positioned to lead BuzzFeed and HuffPost into their next phase of growth. Personally, I’m thrilled to have Byron take over.” The Late Show with Stephen Colbert period of time, and he is very confident that his relationships with talent will bring some amazing stars to the BuzzFeed platform.
Allen added, “Jonah has a great vision and has done an amazing job. BuzzFeed and HuffPost have become iconic global digital media brands with strong audience reach and strong cultural relevance. Our vision is to build on the distinctive 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 top-tier free video streaming service.”
