BuzzFeed has sold Complex — the youth-culture media company it bought three years ago — and will pink-slip another 16% of BuzzFeed’s remaining staffers in a restructuring designed to get back on financial track.
BuzzFeed announced Wednesday that it closed the sale of Complex to ecommerce platform Ntwrk in a $108.6 million all-cash deal. L.A.-based Ntwrk said that together with Complex, it will build a “next-generation content and shopping experience” that it described as a “new destination for ‘superfan’ culture that will define the future of commerce, digital media and music.” Investors in the newly merged company include Universal Music Group, Jimmy Iovine, Main Street Advisors and Goldman Sachs.
In addition to the $108.6 million purchase price, BuzzFeed received approximately $5.7 million related to Complex’s use of the company’s New York offices and “severance- and other employment-related costs.”
BuzzFeed acquired Complex Networks in December 2021 for approximately $198 million in cash and $96 million in equity — for a total price tag of $294 million. However, that included Complex’s First We Feast brand, producer of the popular “Hot Ones” series, which was not sold to Ntwrk and remains with BuzzFeed.
Along with the Complex sale, BuzzFeed announced a new round of layoffs to cut expenses, implementing a 16% reduction in its remaining workforce of a bit under 1,000 across the company (excluding Complex employees who are joining Ntwrk). The BuzzFeed job cuts are expected to yield approximately $23 million in annualized compensation cost savings, the company said. The layoffs come after BuzzFeed in April 2023 announced it wasshuttering its unprofitable BuzzFeed News division and laying off about 180 peopleacross the organization.
Going forward, BuzzFeed will focus on “optimizing sustainable revenue streams with the highest margins,” centered on four brand pillars — BuzzFeed, First We Feast, HuffPost and Tasty. “The sale of Complex represents an important strategic step for BuzzFeed Inc. as we adapt our business to be more profitable, more nimble and more innovative,” BuzzFeed CEO Jonah Peretti said in a statement. “This is also an opportunity to unlock greater value for the Complex brand by combining it with Ntwrk’s expansive, commerce-driven business.”
Ntwrk says it runs a “livestream shopping marketplace that brings together the world’s most influential artists, brands, and personalities to celebrate culture.” The newly merged Ntwrk-Complex company — which has yet to announce an official name — will be led by Aaron Levant, who co-founded Ntwrk with Jamie Iovine and Gaston Dominguez-Letelier in 2018 and has served as CEO since its inception. Levant has a history with Complex: He co-created ComplexCon alongside Marc Ecko, Complex’s founder, in 2016.
“Complex has been a beacon of culture and innovation for over two decades,” Levant said in a statement. “My journey with Complex began as an admirer of their original magazine in 2002 and it has now come full circle as I step into the leadership role. Alongside this impressive team, we will create the definitive global content, commerce and experiential platform of convergence culture.”
According to Ntwrk, the new company will combine “an e-commerce platform anchored in sneakers, streetwear and collectibles with content and music.” UMG’s Interscope Geffen A&M and Capitol Music Group will be the music company’s first labels to collaborate with the new Ntwrk-Complex company to “deliver industry-leading and culture-moving experiences and exclusive collaborations, direct to passionate music fans in groundbreaking and authentic ways.” The new platform will be accessible to artists from all major and independent labels as well, Ntwrk said.
“This partnership will give our artists access to a dynamic network to deepen connections with superfans through unique collaborations and cultural moments,” IGA chairman and CEO John Janick, who will also serve on the board of the new combined company, said in a statement. “We share a collective vision on how D2C, experiential, brand partnerships and content are mutually reinforcing cornerstones of the fan experience.”
IGA previously partnered with Ntwrk for exclusive collaborations with Blackpink x Murakami and the Interscope 30th Anniversary vinyl collection, which brought an intergenerational group of visual artists (including Damien Hirst, Kehinde Wiley and Ed Ruscha) into dialogue with some of the label group’s most iconic artists from the last three decades.
Jimmy Iovine, who founded Interscope Records and Beats by Dre, is the father of Ntwrk’s Jamie Iovine. “Aaron Levant — along with Jamie Iovine and Gaston Dominguez-Letelier — are building an incredible platform and this acquisition will exponentially accelerate its growth,” Jimmy Iovine said in a statement. “Combining the power and reach of Complex with the Ntwrk engine serving creators across music, fashion and art will be transformative for the next generation of consumer technology.”
BuzzFeed said the cash proceeds from the sale of Complex will let it “take meaningful steps” toward strengthening its balance sheet and improving liquidity. It plans to use $30.9 million to pay off the debt and will use $35.5 million to eliminate its revolving credit facility by repaying it in full.
BuzzFeed said it will provide more details of its post-Complex restructuring on Feb. 28. The company is scheduled to release its fourth quarter and full-year 2023 financial results on Monday, March 25, after the market closes.
During Q4, BuzzFeed’s experiential business generated lower sponsorship revenue for the annual ComplexCon event, which the company believes was a result of the pending deal to sell Complex to Ntwrk, according to CFO Matt Omer.
BuzzFeed said Q4 revenue on a continuing-operations basis is now expected to be $73 million to $78 million (with revenue generated from the discontinued operation now expected to be $14 million to $18 million), down from the previous guidance of $99 million to $110 million. The company’s lower-than-expected revenue for Q4 “reflects the challenges of delivering against our bundled go-to-market strategy in a tighter digital advertising market,” Omer said in a statement. “As a result, we have made the decision to reduce the size of our centralized operations, enabling our individual brands to operate with more autonomy and deliver against their differentiated value propositions for advertisers.”
Here’s a sizzle reel from Ntwrk about the Complex deal:
