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BFD Expert Voices - Media Deals

BFD Expert Voices

⚖️ Situational awareness: TikTok heads to court today in an attempt to block the law aimed at forcing its Chinese owner to sell the U.S. operations or risk a nationwide ban, Dan Primack writes.

Data: Yahoo Finance; Chart: Axios Visuals

BuzzFeed teaming up with Netflix for live "Hot Ones" shows could be a crucial financial win to generate more revenue and help pay down debt.

Why it matters: The potential deal comes as the digital media company tries to stabilize its business.

The latest: Netflix is in talks with BuzzFeed to stream several live episodes of the popular celebrity interview show with the goal of reaching an agreement this month, Bloomberg reported Friday and Axios confirmed. 

Shares jumped 10% shortly after the news broke and were up 6% when the market closed Friday.

By the numbers: BuzzFeed has more than $100 million in debt due in December.

The big picture: As its stock languished, BuzzFeed pursued a series of strategy shifts, cost cuts and sales of some properties. In May, the company completed a reverse stock split to avoid a delisting on the Nasdaq. 

Back in February, BuzzFeed announced it was cutting 16% of its staff and selling Complex for $108.6 million in a deal that allowed it to keep "Hot Ones" owner First We Feast. The company has separately shopped around First We Feast for a $70 million price tag, per Bloomberg.

Overall, BuzzFeed has focused on growing its owned and operated properties, like its site and app, through interactive games. By comparison, "Hot Ones" is a distributed asset. 

💭 Kerry's thought bubble: Potentially parting with "Hot Ones" seems like a net loss, given it's a successful IP that brings in diversified revenue. I am somewhat biased as a loyal viewer and purchaser of its signature hot sauces.

BuzzFeed's spicy deal talks

Private equity firm KKR and German billionaire Mathias Döpfner are close to striking a deal that would separate Axel Springer's classifieds business from its media properties, a source confirms to Axios.

Why it matters: An agreement would see KKR exit a media business it once heavily funded and allow Döpfner to pursue more media acquisitions.

By the numbers: KKR took Axel Springer private in a 2019 deal valuing the company at €6.7 billion. KKR and CPPIB, Canada's largest pension fund, own a 48.5% stake in the company.

A deal would give KKR and CPPIB control over Axel Springer's classifieds business, which includes jobs platform StepStone and real estate advertising unit Aviv.

That business alone is valued at more than €10 billion, per the FT, which was first to report news of the deal.

Zoom in: Döpfner and Friede Springer, vice chair and widow of the company's founder, would control Axel Springer's U.S. and European media properties, including Politico, Business Insider and German outlets Bild and Die Welt.

Döpfner would serve as CEO of the new company, the source says.

Döpfner and Springer are expected to keep a minority stake in the classifieds division, the source confirms.

The agreement would value the whole company at €13.5 billion, the FT reports. Axel Springer and KKR declined to comment.

Catch up quick: For the past few years, Döpfner has pushed to modernize and digitize Axel Springer's legacy media brands while expanding its investment in U.S. digital outlets.

Axel Springer purchased Politico in a deal valued at roughly $1 billion in 2021. It acquired a majority stake in Morning Brew in 2020. The deal valued the millennial newsletter startup at $75 million.

Prior to going private, the company acquired Business Insider for about $450 million in 2015. It also invested more than $20 million into Ozy Media, a now-defunct digital website, in 2014.

The big picture: The deal could free up Döpfner to pursue more media acquisitions as he looks to grow Axel Springer's U.S. footprint and increase its investments in artificial intelligence.

Axel Springer recently invested in two AI media startups, Particle and ProRata.ai.

Döpfner and Axel Springer established a U.S. headquarters in Manhattan last year and hired a U.S. executive leadership team.

Reality check: In divesting its stake in Axel Springer's news business, KKR separates itself from a very public and controversial industry.

Axel Springer faced a sexual harassment scandal in Germany in 2022 and was caught in a messy spat with editorial leaders at Business Insider over an editorial investigation of the wife of billionaire Bill Ackman.

What's next: The two sides are expected to discuss the deal this week, the source says.

Sum of the media parts

Photo: Krisztian Bocsi/Bloomberg via Getty Images

Go deeper in our full database in the Axios Pro Deals Tracker.

• Howabout, a calendar-sharing startup, raised $8m in Series A funding led by Goodwater Capital, with participation from FJ Labs, Sequel, Harry Maguire, Boost Capital and Angel Invest. Go deeper

• Aleph Capital Partners and Crestview Partners invested in Saber Interactive, a Fort Lauderdale, Fla., video game developer. Proceeds will help Saber pay off debt owned by Sweden's Embracer Group, in connection with the company's recent MBO. Go deeper

• British antitrust regulators issued a provision ruling against Vodafone's proposed $19b merger of its British operations Three, a unit of Hong Kong-based CK Hutchison. Go deeper

• Flutter (LSE: FLTRF) agreed to pay around $350m for a 56% stake in NSX Group, the parent company of Brazilian gaming group Betnacional. Go deeper

• Talkback and Thames, two Fremantle-owned U.K. reality TV production companies, are merging back together, Deadline reports. Go deeper

• PodcastOne (Nasdaq: PODC) acquired the exclusive sales and distribution rights to "Fool Coverage with Manny MUA and Laura Lee," a pop culture comedy podcast. Go deeper

• LG Electronics of South Korea picked banks for an IPO of its India business, per Bloomberg. Go deeper

Deal flow

• Ross Clark was named CEO of Adventure Media Holdings, a new holding company of specialist media and events companies backed by Gemini Investors. He was CEO of wellness app Sanctuary and previously worked at Epix, Hearst and Condé Nast. Go deeper

• Carolina Dybeck Happe, formerly of GE, was named EVP and chief operations officer at Microsoft. Go deeper

• Samantha Engelhardt, an SVP at the NBA, is joining the New York Mets as COO. Go deeper

• Katelynn Heil was promoted to head of brand marketing and franchise strategy at Moonbug Entertainment and Mike Katzman to Blippi general manager. Juliette Premmereur, formerly of Prime Video, was named senior director of social media. Go deeper

• Jim Lanzone, CEO of Yahoo, was appointed to Snap's board. Go deeper

• Marcus Glover, Bally's Corp. CFO, was appointed to AMC Theatre's board. Go deeper

Movin' on up (or out)

📡 DirecTV, Dish are in talks again to merge satellite-TV businesses (Bloomberg)

"A merger of the two largest satellite-TV providers would create a single company with about 20 million subscribers at a challenging time for the pay-TV industry," Michelle Davis writes.

🎉 Disney, DirecTV reach deal to end TV blackout (Axios)

"The new deal gives DirecTV customers access to Disney's streaming services, such as Disney+, Hulu, ESPN+, as part of select DirecTV packages under a wholesale agreement. The services will also be made available to DirecTV customers on an la carte basis," Sara writes.

🍿 "Beetlejuice Beetlejuice" hands Warner Bros. a lifeline (NYT)

"Warner Bros. managed only a 4.7 percent share of domestic movie-ticket sales over the summer. By that measure, it was Warner's worst performance since analysts started to compile seasonal box office data in 1982," Brooks Barnes writes.

Channel surfing

an illustration of a poster that has a remote control in front of a sunset and says "channel surfing" on a dorm room wall

@tim_bays: "Trying" on Apple TV+. Another one of Apple's great shows that sadly got buried. Perfectly straddles the line of heartwarming, heart-wrenching and hilarious. 

@kerrymflynn: "Greetings from Asbury Park, N.J." by Bruce Springsteen. On repeat between meetings as I relive last night's Sea.Hear.Now Festival.

✏️ Thanks to Michael Flaherty for editing and Katie Lewis for copy editing this newsletter.

Thank you for reading Axios Pro Media Deals! Please ask your friends, colleagues and Sean Evans to sign up.

September 16, 2024

1 big thing: BuzzFeed's spicy deal talks