Comcast Close to $250 Million BuzzFeed Deal, Report
For the past week, rumors have been circulating about Comcast subsidiary NBCUniversal attempting to bolster its online media business. Now, Recode is reporting that NBCUniversal has a “handshake deal” in place for a $250 million investment in BuzzFeed. That would put BuzzFeed’s valuation at a stunning $1.5 billion.
Recode also reports that NBCU is negotiating to invest in Vox Media, although it didn’t put a price tag on the deal.
For Comcast, it’s surely a play to attract more millennials. Recode reports that “people familiar with the proposed deals” say NBCU CEO Steve Burke is betting big on online outlets to tap into customers that aren’t interested in traditional pay TV. Indeed, plenty of young people are forgoing expensive cable subscriptions and looking online for entertainment.
BuzzFeed had revenues of $100 million in 2014, and Chief Revenue Officer Lee Brown said in a recent Ad Week interview that the company hopes to increase its video business and expand internationally. It has 1 billion monthly video views and draws 200 million people to its site each month.
“It’s a really good opportunity for NBCUniversal to gain not only highly engaged, younger eyeballs, but also to continue its mission of pushing content everywhere its end users have a presence,” said Joe Spinelli, a Philadelphia-based venture investor and advisor.
Plus, Comcast has probably noticed the trend where people are slightly engaged in their traditional TV but highly engaged in the BuzzFeed content their watching on their phones of tablets.
Larry Epstein, professor of entertainment and arts management at Drexel University, says the deal could be attractive to Comcast to help it diversify its distribution platforms for its wide variety of content, from films to sports.
“Comcast is trying to stay big and be big in the right businesses in the future,” said Epstein.
Plus, it helps Comcast further monetize its strong Internet business.
“One of the things Comcast has going for it on the distribution side, is that big pipe going into the home,” said Epstein. “They’re going to monetize that pipe one way or another.”
(Neither Spinelli or Epstein have direct knowledge of the potential transaction.)
Comcast already has a 14 percent stake in Vox, owners of SB Nation, The Verge, Polygon, Curbed and Eater.
Last week, the Wall Street Journal reported that Comcast was in talks with Vice, BuzzFeed and Business Insider. A potential deal with Vice would instantly give Comcast and NBCUniversal some serious street cred. The edgy news show is a hit with its HBO show and online presence and has a valuation of $2.5 billion after A&E invested $250 million in the company last year.