BuzzFeed, the popular media company known for its viral content and news articles, has recently completed the sale of Complex to live-video shopping platform NTWRK for a staggering $108.6 million. This move comes just over two years after BuzzFeed acquired Complex in a deal worth nearly $300 million.
The sale of Complex is expected to enhance BuzzFeed’s profitability and allow for a greater focus on its core brands, including BuzzFeed, HuffPost, First We Feast, and Tasty. In addition to the cash deal, an additional $5.7 million will be allocated for severance costs and other employment-related expenses.
As part of a planned strategic restructuring aimed at reducing expenses, BuzzFeed also announced that it will be laying off dozens of employees and scrapping 16 percent of its workforce. This move is expected to yield approximately $23 million in annualized compensation cost savings.
According to BuzzFeed, the restructuring will enable the company to become “more agile, sustainable, and profitable.” The company will focus on optimizing sustainable revenue streams with the highest margins. Under the new structure, each brand within BuzzFeed will operate entrepreneurially with individual strategies and revenue lines tailored to market and audience dynamics.
Jonah Peretti, CEO of BuzzFeed, sees the sale of Complex as an important strategic step for the company. He believes it will make BuzzFeed more profitable, nimble, and innovative. Peretti also sees the sale as an opportunity to unlock greater value for the Complex brand by combining it with NTWRK’s expansive, commerce-driven business.
BuzzFeed plans to use the cash proceeds from the sale to redeem a portion of its convertible notes due in 2026, eliminate its revolving credit facility, finance its strategic restructuring, and optimize working capital.
The new venture formed by NTWRK’s acquisition of Complex will be led by Aaron Levant, who co-founded NTWRK in 2018. NTWRK envisions the new company as a digital hub at the forefront of convergence culture, combining e-commerce with content and music. The venture has attracted investment from Main Street Advisors, Jimmy Iovine (founder of Interscope Records and Beats by Dre), Universal Music Group, and Goldman Sachs.
The job cuts at BuzzFeed come amid a challenging time for the media industry, with several other outlets and publishers announcing layoffs in recent months. BuzzFeed itself laid off 15 percent of its workforce and shut down its news division last year due to a slowdown in digital advertising and shifts in audience behavior.
Unfortunately, BuzzFeed’s financial performance has also been disappointing. Since its initial public offering in 2021, the company’s shares have declined by around 98 percent. On top of that, BuzzFeed recently revised its financial guidance lower for the fourth quarter of 2023, citing lower revenues and adjusted EBITDA.
Despite these challenges, BuzzFeed remains optimistic about its future. With the completion of the sale of Complex and the planned restructuring, the company aims to become more profitable and innovative. It will focus on its core brands and optimize sustainable revenue streams while leveraging AI and interactive content formats.
In conclusion, BuzzFeed’s sale of Complex to NTWRK marks an important strategic step for the media company. While it involves job cuts and a revised financial outlook, BuzzFeed hopes that these measures will strengthen its balance sheet, improve liquidity, and position it for future success in an ever-evolving media landscape.
