Byron Allen, the comedian turned entrepreneur, is buying a majority stake in BuzzFeed, the digital media company pioneering Internet virality.
Allen Family Digital, a company associated with Mr. Allen, will pay $120 million for a 52 percent stake in BuzzFeed, the companies announced Monday. Mr. Allen will become chief executive and chairman of BuzzFeed, replacing Jonah Peretti, the company’s founder, who will become chairman of artificial intelligence.
Mr. Allen, 65, will remain chief executive of Allen Media Group, a news and entertainment company that owns local television stations, the Weather Channel and a television production arm. Allen Media Group produces “Comics Unleashed,” which will replace Stephen Colbert’s “Late Show” on CBS at the end of the month.
The deal will end a two-decade run at BuzzFeed for Mr. Peretti, 52, who founded the company in 2006 as an experiment in a small office in New York’s Chinatown. The company’s valuation blossomed a decade ago when BuzzFeed became synonymous with the future of media, then collapsed as streaming supplanted digital publishing. Disney offered to buy BuzzFeed in 2013 for $650 million, an offer Mr. Peretti rejected.
Mr. Peretti decided to sell this time as BuzzFeed was facing serious financial pressures. The company told investors this year that it was at risk of going out of business as it was saddled with $58.4 million in debt and millions in annual losses. Mr. Peretti said experiments with artificial intelligence were a positive point for the company and that he oversaw the creation of interactive games based on the technology.
Mr. Peretti said during an earnings conference call Monday that BuzzFeed was planning a series of cost cuts, adding that the company would spin off its film and television division as an independent entity. He said his resignation as chief executive would allow him to take “a more active role in product and technology development.”
“I am confident that I can have a greater impact and create more value with this new capability,” said Mr. Peretti.
BuzzFeed said in a press release that the deal will be financed with $20 million in cash at closing, with Allen Family Digital paying an additional $100 million within five years at a 5% interest rate. The deal is expected to be finalized at the end of this month.
On the conference call, Mr. Allen said he plans to expand BuzzFeed’s efforts in streaming and user-generated content, an industry term for videos not made by the company’s employees. He also said BuzzFeed would add local coverage to its national and international news articles on HuffPost, a site acquired by BuzzFeed in 2020.
“As of this moment, BuzzFeed is officially suing YouTube and the other major tech platforms,” Mr. Allen said.
BuzzFeed is just the latest acquisition for Mr. Allen, who forged a media empire by buying properties including local television stations and networks focused on niches such as criminal justice, pets and automobiles. A carriage deal he sought with Comcast became contentious when Mr. Allen accused the cable giant of discriminating against minority-controlled networks. The case was settled, and Mr. Allen eventually locked down distribution to some of his networks.
Mr. Allen has made major deals that don’t always come to fruition. In 2024, he offered $30 billion for Paramount Global, including debt and equity, but the company ultimately agreed to be acquired by Skydance, founded by media scion David Ellison. He also unsuccessfully sought a deal for Black Entertainment Television, a network and streaming service owned by Paramount.
