BuzzFeed Sells Complex to NTWRK for $108.6 Million, Announces Layoffs

BuzzFeed Sells Complex to NTWRK for $108.6 Million, Announces Layoffs
BuzzFeed screens at Times Square during BuzzFeed Inc.'s Listing Day at Nasdaq in New York City on Dec. 6, 2021. (Bennett Raglin/Getty Images for BuzzFeed Inc.)
Katabella Roberts

BuzzFeed has announced plans to lay off dozens of employees after selling Complex to live-video shopping platform NTWRK, a little more than two years after buying the business.

The sale will form a “new and wide-ranging destination for the future of commerce and media,” BuzzFeed said in a Feb. 21 press release announcing the $108.6 million all-cash deal.

Under the deal, an additional $5.7 million will be earmarked for use of the company’s New York offices, severance costs, and other employment-related costs.

The company said the sale of Complex is expected to enhance its profitability and allow for greater focus on BuzzFeed, HuffPost, First We Feast, and Tasty while also aiding BuzzFeed in taking “meaningful steps toward strengthening its balance sheet and improving liquidity,” according to the release.

BuzzFeed purchased Complex in a nearly $300 million deal in 2021.

As part of what BuzzFeed said is a “planned strategic restructuring intended to reduce expenses,” the company will also be scrapping 16 percent of its workforce—a move it expects will yield about $23 million in annualized compensation cost savings.

The “restructuring” is aimed at reducing centralized costs and enabling the company to become “more agile, sustainable, and profitable,” the release said.

“Overall, the company will focus on optimizing sustainable revenue streams with the highest margins.”

‘Important Strategic Step for BuzzFeed’

Under the new structure, BuzzFeed, First We Feast, HuffPost, and Tasty will “each operate entrepreneurially with individual strategies and revenue lines tailored to market and audience dynamics,” according to the press release.

BuzzFeed CEO Jonah Peretti said, “[The sale] represents an important strategic step for BuzzFeed, Inc. as we adapt our business to be more profitable, more nimble, and more innovative.”

He also touted it as “an opportunity to unlock greater value for the Complex brand by combining it with NTWRK’s expansive, commerce-driven business.”

“The changes we announced today will enable an exciting next stage for our company, with increased focus on our iconic brands—BuzzFeed, HuffPost, First We Feast and Hot Ones, and Tasty—a more efficient cost structure and operational model; and the ability to accelerate innovation powered by AI and interactive content formats,” the CEO added.

Buzzfeed said it will use the cash proceeds of the sale to redeem a portion ($30.9 million) of the company’s convertible notes due in 2026, eliminate its revolving credit facility by repaying it in full ($35.5 million–which includes outstanding plus accrued interest and fees), finance its strategic restructuring, and optimize working capital.

The restructuring will occur on Feb. 28, the company said.

In a separate press release, NTWRK said the new venture will be led by Aaron Levant, who co-founded NTWRK with Jamie Iovine and Gaston Dominguez-Letelier in 2018.
A BuzzFeed News logo adorns a wall inside BuzzFeed headquarters in New York on Dec. 11, 2018. (Drew Angerer/Getty Images)
A BuzzFeed News logo adorns a wall inside BuzzFeed headquarters in New York on Dec. 11, 2018. (Drew Angerer/Getty Images)

BuzzFeed Revises Financial Guidance

“By marrying an e-commerce platform anchored in sneakers, streetwear, and collectibles with content and music, the new company will transform into a digital hub at the forefront of convergence culture,” NTWRK said.

Investment advisory firm Main Street Advisors and Jimmy Iovine, founder of Interscope Records and Beats by Dre, are investors in the new venture alongside music label Universal Music Group and Goldman Sachs.

“Alongside this impressive team, we will create the definitive global content, commerce, and experiential platform of convergence culture,” Mr. Levant said.

The job cuts at BuzzFeed come nearly a year after it laid off 15 percent of its workforce and shut down its news division amid a slowdown in digital advertising, shifts in audience behavior, and a declining economy. The company also cut about 180 staff members in late 2022.

Several other media outlets and publishers—including The Washington Post, Los Angeles Times, Condé Nast, Business Insider, Forbes, and The Wall Street Journal—have also announced layoffs in recent months.

Shares of BuzzFeed have declined by about 98 percent since its initial public offering in 2021. The company shares were down 8.5 percent following the latest sale announcement.

Also, on Feb. 21, BuzzFeed revised its financial guidance lower for the fourth quarter of 2023.

Revenues from continuing operations are now expected to be $73 million–$78 million, down from an outlook of $99 million–$110 million posted in November, the company said. The adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) from continuing operations is $15 million–$20 million, compared with its previous forecast of $20 million–$30 million, also posted in November.