BuzzFeed Is Plotting an Aggressive New Media Merger
The year 2017 was, as Derek Thompson wrote in The Atlantic, “A uniquely miserable year in the media business.” He pointed to a 30 percent cut in the editorial budget at Vanity Fair, a $20 million drop in advertising revenue at The New York Times, and 500 layoffs at Oath, the corporate parent of Yahoo and AOL. This year hasn’t been much better, with layoffs at Upworthy, The Outline, McClatchy and the New York Daily News. Local media, especially, is suffering. In July, Kyle Pope wrote in the Columbia Journalism Review that “America’s local news has reached its death spiral phase.”
Given this landscape, BuzzFeed’s chief executive, Jonah Peretti, believes he has the solution, at least to his own company’s survival: a merger with rival internet publishers. According to an interview with The New York Times published Monday, Peretti said, “You have Vice and Vox Media and Group Nine and Refinery. … There’s tons of them that are doing interesting work.”
Peretti pointed to concerns about the spread of disinformation on social media platforms and believes that “[h]aving some bigger companies that actually care about the quality of the content feels like something that’s very valuable.”
The Times’ Edmund Lee sums up Peretti’s arguments: “A larger entity could lobby for better business terms from Facebook and Google, and in turn supply them with videos and articles safe for users and friendlier for advertisers.”
Lee writes that Peretti’s optimism is challenged by the reality of the varying sizes and ownership structures of the other companies, as well as their focus and content: “Any deal would be difficult to pull off given the number of investors involved and the compounding losses that would result from combining several money-losing start-ups. Staff cuts would be inevitable.”
According to the Times, only very limited discussions have taken place.
The companies Peretti names in his merger wish list have all been struggling with either layoffs or labor problems of their own.
Refinery 29 laid off approximately 10 percent of its staff at the end of October, its second round of layoffs this year. Vice recently was roiled by accusations of sexual harassment. Its last layoffs occurred in 2017, but the company announced a hiring freeze in early November, aiming, as The Wall Street Journal reported, “to shrink its workforce by as much as 15% through attrition and cut its selection of digital sites by at least half.”
Union members from Thrillist, one of Group Nine Media’s properties, went on a brief strike this summer, before renegotiating their contract. Vice, too, has a union, and its next bargaining session is in December, before the current contract expires on the 31st of that month. BuzzFeed has its own issues with both declining revenue (it missed targets in 2017 by about $90 million, earning $260 million instead of the hoped-for $350 million) and labor. BuzzFeed’s own media reporter, Steven Perlberg, tweeted from an all-staff meeting that when asked about unions, “@peretti says he is not personally anti union but says he doesn’t think unionization is right for BuzzFeed, per sources.”
Executives from several of the companies Peretti named were supportive but noncommittal regarding a merger. Benjamin Lerer, the chief executive of Group Nine, said there is a “natural camaraderie” between companies and that “I don’t believe my competition is BuzzFeed or Vox or Vice. … We compete on a day-to-day basis for business, but the ultimate competition here is us against traditional TV and also protecting ourselves against the big platforms.”
Vox acknowledged that consolidation may be inevitable, as did Refinery 29, though neither company commented directly on prospects for joining with BuzzFeed. Vice did not respond to the Times’ request for comment.