Making sense of market moves
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BuzzFeed sold the studio behind the YouTube show “Hot Ones” for a non-poultry sum of $82.5 million, offloading one of its most prized properties to pay back a potentially devastating debt bill and push toward a tech-fueled future.
A consortium of investors led by an affiliate of Soros Fund Management bought First We Feast, the parent company of “Hot Ones,” and will run it as an independent entity. The show, in which cool-as-a-cucumber host Sean Evans interviews celebs while they eat spicy chicken wings, has become a massive hit since its debut in 2015. First We Feast has over 14 million YouTube subscribers and does about $30 million in annual revenue.
But BuzzFeed needed to find cash somewhere, and it found it in a stack of chicken bones. Staring down a $120 million bill from debt and interest payments due last week, it’s using the proceeds of the sale to pay that down so it only has $30 million in debt remaining. Now, BuzzFeed says it has a cash balance bigger than its total outstanding debt.
The sale may also fend off an activist threat from entrepreneur Vivek Ramaswamy. Earlier this year, the co-head of DOGE and former Republican presidential candidate took an 8.9% stake in BuzzFeed and urged CEO Jonah Peretti to hire conservative media personalities like Tucker Carlson. That’s…not the direction Peretti wants to take BuzzFeed in, and removing the debt overhang could blunt Ramaswamy’s influence.
So, what is BuzzFeed’s game plan?
Once valued at $1.5 billion, the digital media pioneer and listicle factory is now worth just ~$150 million. To mount a comeback in a hypercompetitive industry, Peretti is going all-in on AI, though the details are vague. In a statement, he said BuzzFeed will “continue to invest in our most scalable and tech-enabled services, launching new AI-powered interactive experiences, and delivering for our loyal audience and business partners.” That’ll be harder to do on an empty stomach.
Finally, what’s up with the Soros involvement? Readers might find it curious that the investment firm, founded by the billionaire George Soros and now led by his son Alex, is diving into the creator economy . But it’s not as weird as it sounds—Soros Fund Management is quietly building a media portfolio that includes a stake in Crooked Media (home to “Pod Save America”) and the leading radio conglomerate Audacy.—NF