Corporate media is on life support. Advertising revenues are sliding, mass layoffs are hitting woke publications, and 'restructurings' are happening all over.
Last month, Authentic Brands Group sent rights holder Arena Group a letter terminating Sports Illustrated's license after failing to pay a $3.75 million quarterly payment at the end of 2023. In other words, the publisher likely wasn't bringing in enough profit to maintain the iconic brand. Arena Group also announced mass layoffs for the brand.
News broke late Wednesday that BuzzFeed, facing severe financial difficulties, is selling Complex, a media start-up focusing on streetwear and pop culture, at a massive loss.
The buyer of Complex is Ntwrk, an e-commerce company backed by Main Street Advisors and LiveNation Entertainment. Ntwrk agreed to pay $108.6 million for Complex. It will also pay BuzzFeed $5.7 million to cover severance expenses for laid-off Complex employees.
The company also announced a planned strategic restructuring intended to reduce expenses by implementing a 16% reduction in the remaining workforce, which is expected to yield approximately $23 million in annualized compensation cost savings. - BuzzFeed wrote in a statement
BuzzFeed is taking a massive loss on Complex, which it bought for $294 million in cash and stock in 2021.
Jonah Peretti, BuzzFeed's co-founder and chief executive, said:
"The sale of Complex represents an important strategic step for BuzzFeed, Inc. as we adapt our business to be more profitable, more nimble, and more innovative."
BuzzFeed's valuation has sharply declined since its public debut in 2021. The sale of Complex will pay off more than $60 million in debt. According to financial records, BuzzFeed is grappling with $150 million in debt maturing in 2026 and another $33.8 million from a credit line.
BuzzFeed shares jumped more than 100% in the after-hours trading session to nearly 47 cents.
As for the rest of the industry, over 30,000 workers were laid off by media companies in 2023.
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