Media entrepreneur Byron Allen is set to become the new chief executive of BuzzFeed after agreeing to acquire a controlling stake in the company through a $120 million deal. The agreement gives Allen Family Digital about 52% ownership of BuzzFeed and places Allen in charge of the company founded by Jonah Peretti in 2006.
BuzzFeed disclosed that Allen Family Digital will purchase 40 million shares at $3 each. The transaction includes $20 million in cash and a $100 million promissory note due in five years with 5% annual interest. The company said the deal is expected to close later this month, The Wall Street Journal reported.
Peretti will step down as CEO and move into a newly created role as president of BuzzFeed AI once the transaction closes. Allen will become chairman and chief executive of the company, according to BuzzFeed filings cited by Variety.
The deal comes during a difficult period for digital media companies that once relied heavily on social media traffic and online advertising revenue. BuzzFeed shut down BuzzFeed News in 2023 as part of cost-cutting efforts and later sold Complex in another restructuring move. Business Insider noted that BuzzFeed's struggles reflected broader problems across digital publishers including Vice Media and Vox Media.
BuzzFeed also reported weaker financial results alongside the acquisition announcement. First-quarter revenue fell 12.4% to $31.6 million while net losses widened to $15.1 million, according to company filings cited by Reuters.
The company's stock surged after news of the transaction became public. BuzzFeed shares jumped more than 150% in extended trading Monday evening, MarketWatch reported.
Allen, founder of Allen Media Group, already owns The Weather Channel and dozens of local television stations across the U.S. He has spent years attempting to expand his media empire through acquisitions involving television networks and media companies. Axios reported that Allen had previously pursued bids tied to Paramount Global, BET and Tegna.
The acquisition also gives Allen control of HuffPost, which BuzzFeed acquired from Verizon Media in 2020. Allen will reportedly oversee both BuzzFeed and HuffPost after the transaction is finalized.
BuzzFeed was once among the fastest-growing companies in digital publishing and reached a valuation estimated at more than $1 billion during the peak of online media expansion. The company later went public through a SPAC merger in 2021, but its stock price collapsed in the years that followed. BuzzFeed shares had lost more than 98% of their value before Monday's rally.
In a statement released with the announcement, Peretti said Allen's experience in media operations and content businesses made him suited to lead BuzzFeed through its next phase. Allen said the company plans to focus on streaming, video and digital content expansion.
