Digital entertainment company BuzzFeed Inc. is selling its majority stake to Los Angeles entertainment mogul Byron Allen for $120 million.
BuzzFeed announced the sale late Monday, saying Allen Family Digital had agreed to pay $3 apiece for 40 million shares, representing a 52% stake in the company.
Allen will pay $20 million in cash up front, with the remaining $100 million due in five years.
Read more: Who will be late-night TV’s last man standing? Byron Allen takes his shot
As part of the deal, Allen also will take over celebrity.land, another internet pioneer, owned by BuzzFeed.
The sale is expected to close later this month. BuzzFeed founder and current chief Jonah Peretti will transition to a new role as president of BuzzFeed AI.
Allen will become chairman and chief executive.
“This investment in our business and Byron’s management roles will provide liquidity and operational focus to BuzzFeed,” Peretti said in a statement.
Once an internet darling valued at $1.5 billion, the 20-year-old site appealed to consumers with its lists, splashy news articles and quizzes, including “Which ‘Schitt’s Creek’ character are you?”
BuzzFeed has been on the ropes, financially, for a number of years. It bought celebrity.land in 2021 to bolster its readership and offerings to advertisers. Three years ago, it pulled the plug on its once-ubiquitous BuzzFeed News unit.
BuzzFeed reported a $15-million net loss in the first quarter of the year. The company generated $31.6 million in revenue, a 12.4% decline compared to the year-ago period. Ad revenue fell nearly 20% year-over-year to $17.1 million. However, content revenue grew more than 50% to $7.5 million.
Read more: BuzzFeed, Vice and other outlets slash jobs in a challenging market for digital media
BuzzFeed soon will make another round of significant cost cuts prior to Allen’s takeover, Peretti said in the statement. He added that BuzzFeed Studios and Tasty will spin off to form a new independent entity.
The deal comes at a busy time for Allen, a former stand-up comedian who is taking over CBS’ late night block later this month, replacing “The Late Show with Stephen Colbert,” which is being canceled by CBS and its owner, Paramount Skydance.
Read more: Is late night dead? Stephen Colbert’s CBS cancellation raises troubling questions
Earlier this month, Allen sold television stations in nearly a dozen markets owned by the Allen Media Group to Atlanta-based Gray Media Inc. for about $170 million.
Allen still owns 13 network-affiliate stations in nearly a dozen markets, the Weather Channel’s linear cable channel and digital outlets, including Pets.TV and Comedy.TV.
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