Allen Family Digital, an affiliate of Byron Allen’s family office, under has a deal to acquire a majority stake in Buzzfeed with Byron Allen becoming chairman and CEO.
Current chief executive and co-founder Jonah Peretti will transition to a newly created role as president of BuzzFeed AI.
Under the terms of the agreement, Allen Family Digital will acquire 40 million shares of publicly traded BuzzFeed at a price of $3 a share for a total purchase price of $120 million. Upon closing, Allen FamilyDigital will own about 52% of the company’s outstanding shares.
The purchase price will be funded with $20 million in cash at closing and a $100 million promissory note due five years from closing, accruing interest at 5% annually.
The transaction is expected to close by the end of May subject to customary closing conditions. Peretti said that the the digital company in planning significant changes under new management including cost reductions and, with the cash infusion, setting up BuzzFeed Studios to pursue vertical micro-dramas, animation, digital video and feature films.
Buzzfeed also owns Huffpost, which it acquired from Verizon Media in 2021.
“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,” Peretti said. “And personally, I’m thrilled Byron is taking over The Late Show With Stephen Colbert’s time slot, and highly confident that his relationships with talent will bring some incredible stars to the BuzzFeed platform.”
Peretti said he will switch focus “to a more hands-on role developing products and technology that are only possible because of recent advances in AI. I’m convinced that AI will fundamentally transform the media industry and empower creative people to build in new ways, and I believe the opportunity is enormous.”
Allen said the goal is to expand 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.”
Under Peretti’s leadership, he said, “BuzzFeed became one of the defining digital media brands of a generation, pioneering social distribution, viral content, and AI-assisted publishing.”
Allen is the founder, chairman and CEO of Allen Media Group which owns 13 TV stations, affiliates of ABC, CBS and NBC in 11 markets, as well 10 HD television networks including The Weather Channel, The Grio, Pets.TV and Comedy.TV. Allen owns a two-hour nightly comedy block on CBS Network and also produces, distributes, and sells advertising for 74 television programs, making him one of the largest independent producers/distributors of first-run syndicated television programming.
He’s been on the prowl for a deal, having pursued, among other targets, BET, Paramount and the NFL’s Denver Broncos. He recently acquired a big chunk of newly standalone Starz, prompting that company to put a one-year poison pill in place.
The sale news included Buzzfeed’s latest quarterly numbers. Revenue fell 12.4% to $31.6 million for the three months ended in March. Ad revenue dropped about 20%. Content revenue surged 69% to $7.5 million. Commerce and other revenue declined 32% year-over-year to $6.9 million.
Net losses widened to $15 million from $12.5 million.
More to come
English (US) ·