Photo: Michael Kovac/AFI/Getty Images
Earlier this week, after years of financial struggles, BuzzFeed got a lifeline. Byron Allen, a media entrepreneur known for making sometimes unsolicited bids on massive companies such as Paramount Global and Tegna, has agreed to pay $120 million for a 52 percent stake in the digital-media company. BuzzFeed founder Jonah Peretti will end his two-decade run as the company’s chief executive and become president of BuzzFeed AI — a role that he’s essentially occupied for years, creating products like “BF Island” and “Quiz Party” that have failed to achieve the viral heights of BuzzFeed’s former offerings.
BuzzFeed’s fall from the pinnacle of internet media has been well-documented. Algorithmic changes, a plunge in digital advertising money, and investor disfavor have all forced Peretti to scramble to keep his company afloat. Peretti acquired HuffPost and Complex and then took BuzzFeed public in 2021. In 2023 BuzzFeed shuttered its award-winning news division and a year later sold Complex. Saddled with debt and strapped for cash, BuzzFeed earlier this year warned that it had “substantial doubt” about its ability to stay in business. With its stock trading under $1, it also risked being delisted from the Nasdaq (again). The company had discussions with other potential partners, but Allen stood out for his willingness to buy the whole thing.
Allen, a former comic, says he sees BuzzFeed as a means of creating the next free streaming giant, a la YouTube. His private media company, Allen Media Group, owns the Weather Channel and more than 30 local TV stations. Last month, he purchased Stephen Colbert’s late-night slot on CBS, which will now air Comics Unleashed, a comedy talk show hosted by Allen. This interview has been edited and condensed for clarity.
So why are you buying a majority stake in Buzzfeed? I think a lot of people are wondering about your interest in it, given its struggles over the years.
I think Jonah Peretti’s done a phenomenal job building two iconic brands. BuzzFeed is a wonderful platform, as well as HuffPost. And we see a huge opportunity to build on what they’ve already laid down in the last 20 years and to navigate them to free streaming. The world’s two favorite words: free and streaming. As the cost of living goes up and inflation and gas prices, the word free will become even more popular each and every day. We’re bringing BuzzFeed to the living room and putting it on your screen. So you should be able to go to BuzzFeed soon and stream movies and TV shows and documentaries.
You know, we own something as well called Local Now. And Local Now uses artificial intelligence and proprietary software to curate, aggregate, and stream super hyper-local news, weather, sports, and traffic. It’s won best streamer twice. And no one knows about it. It’s beat Netflix, Amazon, Hulu, Disney Plus — twice — as best streamer and no one knows about it. Everybody knows about BuzzFeed. Everybody knows about HuffPost. So I want to take that technology at Local Now and have it be the engine under the hood for BuzzFeed and HuffPost to provide streaming. That’s the idea.
We have close to a thousand fast channels including a fast show from Johnny Carson, Kevin Hart, People Magazine, Architectural Digest, you name it. It’s real simple. We are chasing YouTube. YouTube is amazing, phenomenal, gigantic, but most of the content there is not exclusive. And what people put up on YouTube, they can also put up on BuzzFeed. That’s what we’re working towards. And yes, it would be a rev share with user generated content, just like it’s rev share with the premium produced content.
And so BuzzFeed’s use to you is its audience or the fact that a lot of people know about it compared to Local Now? What kind of an instrument or tool do you see BuzzFeed as?
Well, great brand — great global brand — and huge audience. And it will continue to do what it’s been doing and now this is additive. Also, one of the few publicly traded companies where one could, if they wanted to, invest in something where you have the intersection of artificial intelligence, streaming, and content. When you think about artificial intelligence, it’s debt and large private equity deals with valuations of $500 billion to $2 trillion. So this is a huge opportunity to say, okay, not only do we want to build this, we want to build this free streaming platform and do it in a public vehicle — a public vehicle that, once my capital is injected onto the balance sheet, will have little to no debt.
It seems like, based on what you paid for it, that you feel like it’s worth more than the market does. Can you talk a little bit about that? Do you see it primarily as an AI company, or what role does that play? Obviously it used to have a news arm and doesn’t anymore, and Jonah’s been doing a lot of work with AI over the years.
It’s not going to be primarily an AI company, but AI will be very important and it will be used in a way to advance the BuzzFeed and HuffPost platforms. So the valuation, I think, is a fair valuation. More than a fair valuation. You know, we paid $3 a share when it was trading at 70 cents a share. We also know that investing in this company and putting it into free streaming, there’s huge opportunity, far greater than the market cap that we bought it at, which would be an equivalent of about $240 million in terms of evaluation, buying a little over half the company. We know where the ad dollars are and where the ad dollars are heading. Everybody has seen the numbers. Streaming has surpassed linear cable. We’re very much in the linear cable business, owning a portfolio of 12 cable networks, the Weather Channel being the most famous, as well as comedy.tv and pets.tv and our Emmy award-winning cars.tv. And also we’re seeing the migration of linear ad dollars moving over to digital at a double digit rate. Far faster than anyone could ever imagine. So we’re very happy being in the digital space and the free digital streaming space. We see it as a great opportunity for organic growth and strategic acquisitions. It’s a wonderful vehicle to go and buy other assets and to grow it and to scale it up.
What kind of other assets?
More digital, more streaming, more technology that makes the website even more efficient. It’s a huge opportunity and there’s a void there. You will never have enough free streaming platforms. They’re consolidating SVOD, subscription video on demand. There hasn’t been a big push on AVOD, advertising video on demand. So AVOD is very different and that’s where we believe the aggregation, the curation of premium free streaming content is key and we have the ability to promote now. You know, I own CBS Late Night. So you have the ability to promote this content over there at BuzzFeed and HuffPost. HuffPost has the ability to promote Comics Unleashed with Byron Allen and Funny You Should Ask on CBS. We have the ability to promote one another. There’s the difference.
Aside from the content that you are producing, where is the content going to come from? Is it gonna be stuff made by BuzzFeed or will it come from elsewhere? Is that where the AI-generated content comes in?
All of the above. That’s the beautiful thing about it. You don’t have to choose. It’s our content, Buzzfeed-generated and -produced content, artificial intelligence, user-generated content. Now at Local Now, which has won best streamer, we have over 30,000 movies, TV shows and documentaries there on all of these fast channels. They’re all sitting there already, on a rev-share basis. If you’ve seen YouTube, you’ve seen the future of BuzzFeed. Everything that’s sitting at YouTube can be sitting at BuzzFeed.
Sure, but you just gotta get people to go to Buzzfeed, right? To look for it.
And content brings you to the platform.
I’m curious about the payment structure: $20 million in cash and then a promise to pay another $100 million, plus interest, in five years.
That’s just the structure that we wanted to take care of their immediate financial needs.
And what is that money mostly going to go towards?
I haven’t taken over yet, but clearly to reduce debt and provide additional liquidity.
What do you think of Jonah? What is he gonna be doing as president of Buzzfeed AI?
I think Jonah’s great. I think he is a magnificent visionary. He has brought us these iconic brands which have done quite well. And yes, their heyday was years ago, but it was accomplished. Now his passion is AI and I said, “Hey, I’m here to help. I’m here to free you up. You go focus on AI because we can use it and we wanna be the leader in the intersection of AI and content and aggregation and curation and free streaming.” And you’re not gonna accomplish that without having a real strong leader in the AI category and Jonah wants to do that. That was his ask. I think with him focusing on AI and me focusing on branding and revenue and the aggregation of premium content, we’re off to the races
Where are you from originally?
I am from just outside New York City.
Okay. So, I mean, have you ever seen Local Now?
I’ve never seen it, but it’s the first thing I’m going to look at after this call.
Have you ever heard of Local Now?
I’ve heard of it because I was reading about you today.
And if you didn’t read about me, you would not have known about a streaming service that’s free, that’s won best streamer twice. And here you are, you’re very smart, you’re well-informed, and you never even knew about it.
Right.
Think about that. It provides super hyper local news down to your zip code. We’re the only ones to do it.
So will there be any text-based work going on over there, or do you feel like in the next five years you want it to be completely streaming?
Oh, yeah. We’re gonna build on the foundation of that. That’s not going away. We believe in human beings writing these articles.
So HuffPost will continue to operate a newsroom and so forth?
Yes. And I love HuffPost and I think HuffPost is amazing. Now, think about this. You talked about BuzzFeed’s newsroom going away. Well, now their newsroom could be 300, 400 local television stations. When you check out Local Now, you’ll go, “Oh my God.” You’ll look at Local Now and go, “How did I not know about that? ” Well, that’s over now because now when you go to BuzzFeed and Huff Post, what you see at Local Now, you will see it there.
And what, if any, engagement did you have with Buzzfeed in the 2010s? You know, the watermelon, the dress, was it on your radar or …
Zero.
Zero?
Zero. I mean, very much aware of it. But I never talked to them about business or partnerships or anything like that. Aware of it and an admirer from a distance.
So then how did this deal come to be?
Well, you know, we’re sitting there with Local Now. I’ve invested all of this capital and I’m like, “Here, we have one of the best secrets in the world of free streaming. How do we get people to really, you know, engage with this wonderful platform?” I saw the issues that Buzzfeed was having financially and I said, “Hey, here’s how I can help.” And this is my ask: we shore up your balance sheet, I’ll take approximately a 52 percent interest and control the board and let’s start to build this out.
And you didn’t have anxiety that Buzzfeed’s brand was perhaps so battered after years of financial struggles? Did you feel like that would be a hindrance?
Not at all. What you’re talking about is, you know, you’re under the hood. That’s the media. Not the consumer. I don’t live in that bubble. The media is in the media world. The media’s gonna do what they’re gonna do, say what they’re going to say, but quite frankly, the media doesn’t know. They don’t. The press doesn’t know. I don’t listen to the media. I listen to the people. That’s how I built my business.
Right.
People who listen to the media, they crash and burn. The ones who listen to the people go to the top. I don’t worry about the media. I focus on the people. The people love BuzzFeed. The people love Tasty. The people love HuffPost.
Right.
You look at Comics Unleashed. I created that show. I grew up in the comedy clubs. I know the power of comedy, right? What the media, what they don’t know is they go, “Well, comedy built everything, built the movie industry.” Charlie Chaplin, Buster Keaton, Harold Lloyd; it built radio, George Burns, Gracie Allen, Bob Holt, Milton Burrow, those same comedians built television. Then you moved on to cable, you know, built by Richard Pryor and George Carl. And you move on to today, streaming built by Dave Chappelle and Chris Rock and Adam Sandler. Don’t be surprised if you see a lot of comedy at BuzzFeed.
Well, it seems like it’s very personal for you and I saw that you’re completing the deal through your family office, not your private media company.
Yeah, just diversifying. You never know. Anything’s possible. You know, let me see how I like a publicly traded company.
My last question for you is, do you think the dress is blue or gold?
Well, I don’t know, but I’ll say my favorite color is blue.
I’ve heard that the actual dress is at BuzzFeed’s New York office, so maybe when you go, you’ll be able to see it in person and you can let me know.
Okay. I’ll let you know. I will definitely let you know.
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