Byron Allen has purchased a controlling stake in one-time news giant BuzzFeed, as the media mogul and new late-night personality has inked a $120 agreement with the site, which will take a 52% majority stake in the company, as well as the CEO role from Buzzfeed founder Jonah Peretti.
According to The Hollywood Reporter, the move is funded by $20 million in cash and $100 million in the form of a promissory note due five years after the close of the deal in May. According to the publication, the move was revealed as BuzzFeed reported quarterly earnings that included a nearly 20 percent decline in advertising revenue year-over-year.
Allen replaces Peretti, who will become president of artificial intelligence. Allen will remain chief executive of Allen Media Group, a company that owns local TV stations, the Weather Channel, and a TV production arm. Allen Media Group also produces the show Comics Unleashed, which is set by CBS to replace The Late Show with Stephen Colbert at the end of the month.
“I’m confident I can have a bigger impact and create more value in this new capacity,” Peretti said on a conference call on Monday, as revealed by The New York Times. According to the publication, Peretti stated that stepping down as chief executive would allow him to play “a more hands-on role developing products and technology.”
Additional cost-cutting measures are also expected to follow.
Peretti originally founded BuzzFeed in 2006, and at the company’s height in 2013, Disney reportedly offered to purchase BuzzFeed for $650 million, an offer Peretti rejected at the time. According to The New York Times, the company’s valuation has sharply declined in the years since streaming overtook digital publishing. The publication also reported that BuzzFeed warned investors earlier this year that it faced uncertainty about its ability to continue operating as a business while struggling with $58.4 million in debt and millions in annual losses.
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