Entertainment executive Byron Allen will take a controlling stake in BuzzFeed under a $120 million deal that reshapes leadership at the struggling digital media company.
BuzzFeed announced on Monday that Allen’s family office will purchase 40 million newly issued shares at $3 each, giving him a 52% ownership stake. The company said Allen will become chairman and CEO after the transaction closes, and founder Jonah Peretti will transition into the role of president of BuzzFeed AI.
The deal comes at a time when BuzzFeed continues to navigate its financial instability that has affected much of the digital publishing industry in recent years. The company has faced declining advertising revenue, layoffs and broader challenges tied to changes in social media traffic and online audience behavior.
Peretti, who co-founded BuzzFeed in 2006, said the company has recently focused on reducing costs and restructuring parts of its business. In a statement announcing the agreement, he said BuzzFeed plans to place BuzzFeed Studios into a separate entity while increasing its focus on artificial intelligence-driven products and content tools.
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Allen said he sees opportunities to expand BuzzFeed’s digital and streaming operations. His Allen Media Group owns several television stations and entertainment networks and has pursued acquisitions across the media industry in recent years.
BuzzFeed became one of the defining digital media companies of the 2010s through viral quizzes, internet pop culture coverage and social-media-focused storytelling. The company later expanded into investigative journalism, entertainment reporting and food content, including its widely viewed Tasty brand.
After going public through a special purpose acquisition company in 2021, BuzzFeed struggled to maintain growth as advertising markets weakened and technology platforms altered the way news and entertainment content reached audiences online.
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The company’s stock rose sharply in after-hours trading following news of Allen’s investment, reflecting investor optimism that the agreement could provide financial stability and a new direction for the company.
The acquisition also highlights continuing changes across the digital media landscape, where publishers have faced mounting pressure from shifting advertising trends and increased competition from platforms including TikTok, YouTube and Instagram.
Under the terms disclosed by BuzzFeed, Allen’s investment includes $20 million in cash and a $100 million promissory note carrying 5% annual interest that matures in five years.
The transaction is expected to close later this month, subject to customary conditions.