Byron Allen’s acquisition of BuzzFeed has closed.
As AFROTECH™ previously reported, Allen is a media mogul with an estimated net worth of $1 billion through Allen Media Group, an affiliate of Allen’s family office. Allen Media Group’s portfolio includes nearly 400 local TV broadcast affiliates and a network of 650 free, ad-supported television channels, according to Variety.
In May, Allen Media Group announced it would acquire BuzzFeed for $120 million, and Allen would become CEO. Allen succeeds Jonah Peretti, who will step into the role of president of BuzzFeed AI after two decades as CEO. Peretti carries the belief that AI “will fundamentally transform the media industry and empower creative people to build in new ways, and I believe the opportunity is enormous.”
The deal officially closed on May 27 through Allen Family Digital, with an acquisition of nearly 51% of BuzzFeed’s outstanding shares, per Variety. Allen Family Digital acquired 40 million shares of BuzzFeed at $3 per share, for a total purchase price of $120 million. It was completed with $20 million in cash and a $100 million promissory note due in five years from the deal’s closing date, with a 5% annual interest rate.
BuzzFeed also said $12.5 million in cash from the transaction was used to pay down its debt, Variety reports.
Peretti said Allen’s “deep relationships with advertisers, partners and sources of capital free me to focus on what I’ve always loved most: the intersection of tech and media,” according to the outlet.
“I’m thrilled to pass him the baton, and even more excited about what comes next. AI is going to create a new medium for content that wasn’t possible before, and I’m convinced the opportunity is enormous,” he continued.
Allen commented:
“Our vision is to build on the iconic 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 premier free-streaming video service.”
Variety notes that these efforts will be in conjunction with Allen Media Group’s Local Now, a free streaming platform that offers original local news, weather, traffic, sports, and entertainment content customized by zip code.
BuzzFeed told the outlet that “the company sees a significant opportunity to bring a new kind of free-streaming experience directly to consumers.”
The company will also integrate AI to “accelerate content creation, distribution, and discovery across both organizations as BuzzFeed builds toward becoming a premier free-streaming video destination,” per the outlet.
