Media entrepreneur Byron Allen is taking control of BuzzFeed, acquiring a majority stake in the once-dominant digital publisher for $120 million. Allen will assume the role of CEO and chairman under the deal, while founder Jonah Peretti shifts to a newly created position as president of BuzzFeed AI.
The transaction marks a dramatic reversal for a company that commanded a $1.7 billion valuation barely a decade ago. BuzzFeed's stock has cratered to 73 cents per share, putting the company on the brink of forced delisting from the Nasdaq. Without Allen's intervention, bankruptcy appeared inevitable.
Allen's Allen Family Digital will purchase 40 million shares at $3 each, securing 52% ownership. The investor is covering $20 million upfront and financing the remainder through a promissory note due in five years at 5% annual interest.
Peretti acknowledged the dire circumstances in a statement, citing "significant cost reductions" already underway. The company is spinning off Tasty, its food-focused social media brand, and BuzzFeed Studios, which creates micro-dramas and premium video content, into a separate independent entity. Details on Peretti's AI-focused role remain sparse.
BuzzFeed's collapse reflects a brutal shift in digital media economics. The company went public via special-purpose acquisition vehicle in 2021, loading up on debt that helped finance the roughly $300 million acquisition of Complex Networks. Rising interest costs and a migration away from advertising-dependent traffic models strangled the business. Management proved too slow to adapt, and investors abandoned ship.
The company has already shed major properties, selling off Complex and the First We Feast franchise while shuttering its acclaimed news division entirely. The latest valuation, roughly $28 million based on Monday's closing price, represents a staggering 98% collapse from its peak.
Allen, known for aggressive media rollups, has pursued much larger targets in recent years, including Paramount Global and Tegna, without success. His recent move to supply late-night programming for Allen Media Group's stations follows a deal with CBS to fill the Stephen Colbert time slot after the host's final show in two weeks.
The transaction is expected to close by May. BuzzFeed's management is banking on Allen's operational muscle and fresh capital to stabilize operations, though reversing the company's trajectory will require more than financial rescue.
Author James Rodriguez: "Allen's getting a cut-rate buy on a brand that still has audience reach, but he's inheriting a debt trap and a business model that investors have already rejected."
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