BuzzFeed is in advanced talks to sell Complex Networks, the streetwise digital media company behind the popular ComplexCon cultural festival, for less than half the price it paid for the company two years ago, citing industrywide problems affecting digital media. There is a signal.
Ntwrk, the e-commerce company backed by LiveNation Entertainment and Main Street Advisors, is close to paying just under $140 million for the complex, according to two people familiar with the deal. BuzzFeed paid approximately $300 million for the complex in 2021.
BuzzFeed plans to retain First We Feast, the division of Complex responsible for the popular “Hot Ones” interview franchise, following the transaction, one of the people said. First We Feast, which has garnered billions of views on YouTube, will be part of BuzzFeed’s portfolio of brands focused on food culture, which also includes recipe guide Tasty.
When BuzzFeed went public two years ago, it made the complex a centerpiece of its pitch to investors. Complex was reliably profitable, a milestone that eluded many in the digital media industry, and its portfolio of brands seemed a natural fit for BuzzFeed’s focus on younger audiences.
But shareholders aren’t bullish about BuzzFeed’s prospects. Since going public through a shell company in 2021, the company’s share price has declined significantly. The company is now worth about $40 million, slightly less than its 2016 valuation of $1.7 billion.
BuzzFeed reported debt of more than $155 million at the end of June. The company suffered a loss of $64 million in the first half of this year.
The information was first reported by BuzzFeed was selling Complex.
As the digital media industry continues to consolidate, many other companies have bought companies at high valuations that have fallen sharply. Vice Media purchased Refinery29 in a deal that valued the company at $400 million; Vice eventually went bankrupt. Group Nine Media acquired PopSugar in 2019 in a deal that valued the female-focused publisher at $300 million. Group Nine eventually sold to Vox Media, which recently raised money at a fraction of its earlier valuation.
The acquisition of the complex would represent a major expansion for Ntwrk, an e-commerce company that has attracted major backers from the technology, media and sports sectors. Los Angeles Lakers stars LeBron James and Arnold Schwarzenegger invest indirectly in the business through Main Street Advisors. Jimmy Iovine, the producer and record executive who sold Beats Electronics to Apple for $3 billion with his partner Dr. Dre in 2014, is also an investor.
A person familiar with Ntwrk’s strategy said the company plans to integrate the complex with its various business lines, incorporating the media company’s large digital audience to sell products such as shoes and apparel. Complex is known for its coverage of streetwear and its popular ComplexCon festival, which attracts thousands of geeks and sneakerheads each year.