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One digital media giant BuzzFeed is acquiring another, Verizon-owned HuffPost, in an all-stock offer that unites 2 companies that have struggled to get lucrative with big staffs to support and advertisement profits declines in the pandemic.
As part of the offer, Verizon Media is paying BuzzFeed a concealed cash investment and will be a minority investor in BuzzFeed, according to The Wall Street Journal, which was first to report the news.
Inside both companies, speculation and reports about layoffs– particularly from the HuffPost side– flew this week, according to a number of workers that Business Expert spoke with.
” The first response was shock,” stated a BuzzFeed editorial staffer. “It’s a newsroom that appreciates individuals. Individuals started wondering about their equivalents at HuffPost and if they would lose their jobs.”
Over at the HuffPost, most staffers discovered of the acquisition from the Journal, HuffPost’s report on the deal stated.
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” We were definitely stunned,” said Celeste Lavin, front page editor and union agent at HuffPost.
Some insiders said that BuzzFeed would be a much better owner for HuffPost than Verizon, and personnel spent time Slacking each other about how BuzzFeed’s benefits package compares to that of Verizon.
The most apparent place for cuts will remain in operational, admin and financing functions, but staffers likewise wondered about how any overlap between the newsrooms would be dealt with.
BuzzFeed stated that the two newsrooms would stay different with BuzzFeed founder and CEO Jonah Peretti running both companies and BuzzFeed News editor-in-chief Mark Schoofs supervising both newsrooms.
One source pointed to an internal Frequently Asked Question document sent out to BuzzFeed staffers that they stated sent out mixed messages, and that it’s unclear how long the two companies will stay independent.
The FAQ, which has actually been seen by Business Expert, said that BuzzFeed and HuffPost “will complete for scoops and stories.” It also motivated the newsrooms to work together. “At the very same time, we will all become part of the very same business, which means that we can learn from and collaborate with them.”
Both newsrooms are repped by unions– HuffPost by the Writers Guild of America, East; and BuzzFeed News by the NewsGuild of New York City. HuffPost’s union has about 130 members while the company has around 250 employees. While the unions don’t secure staffers from layoffs, they do provide staff members some protections.
” Our union members are worried about the possibility of layoffs and grateful we fought so hard for a follower provision so our union agreement and rights embedded in it will rollover no matter our owner,” Lavin said.
A search is underway to employ a HuffPost editor-in-chief that will report to Schoofs.
According to one source at HuffPost, managing editor Hillary Frey has actually been filling out as leading editor and might be a candidate for the editor-in-chief function. A single person who speaks to individuals involved floated The New york city Times’ Nikole Hannah-Jones, who won a Pulitzer Reward for commentary for her work on “The 1619 Project,” as a possible prospect.
BuzzFeed’s Schoofs might certainly choose a big Hollywood name or return it to its initial form under co-founder Arianna Huffington that delivered service-oriented journalism on subjects such as divorce, parenting and health.
A rep for Verizon did not respond to an ask for remark.
BuzzFeed could use the acquisition to boost its advertising
Talking through the deal to staffers during an all-hands meeting on Thursday, BuzzFeed CEO Peretti said he anticipated HuffPost to be lucrative by the end of next year which the HuffPost brand name was stronger than HuffPost’s service.
The tie-up could help both businesses make a stronger pitch to advertisers. HuffPost’s readers have a broader series of ages and a more affluent audience than BuzzFeed’s. Together, BuzzFeed and HuffPost would reach 103 million US monthly users, 29%more than BuzzFeed alone, per Comscore information that BuzzFeed shared in the internal FAQ.
SimilarWeb data pulled by Service Expert shows that a combined BuzzFeed, BuzzFeed News, and HuffPost would be the fifth-biggest news site, behind CNN, BBC, The New York City Times, and The Guardian– though the audiences would likely have some overlap. The Daily Mail, Washington Post, Fox News, Organization Expert, and Forbes round out SimilarWeb’s ranking of the top 10 news sites.
But the market has been souring on ad-based digital media
The stock-based offer shows how much the when sky-high assessments of both media business has shrunk significantly throughout the years. BuzzFeed stated it would pay this year after layoffs and pay cuts; one source said HuffPost’s losses are believed to be in the area of $20 million. That’s a number familiar to a minimum of one expert, though it couldn’t be separately confirmed.
Bloomberg reported that the Verizon minority stake values BuzzFeed at about $1.7 billion, which is the exact same quantity BuzzFeed was valued at in 2016 when NBCUniversal invested $200 million into the business.
More broadly, after investing billions on media with huge bets to alter how media is made and sold, telecom giants Verizon and AT&T have actually downsized their media financial investments to concentrate on their core services. Speculation about the future of the HuffPost has swirled for years as Verizon has shed its media acquisitions; Verizon Media’s top advertisement sales executive Jeff Lucas quit earlier this year.
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Vox Media simply lost co-founder, Ezra Klein, who stated he’s leaving for The New York Times, joining founding BuzzFeed editor in chief Ben Smith; and Lauren Williams, SVP of Vox.com, who’s starting a brand-new endeavor. Lydia Polgreen left the HuffPost as editor in chief in March for Gimlet Media.
Eyes are relying on the next media offers
Even with a reduced landscape for digital ad dollars, the arrival of the so-called “dumb cash,” SPACs (Special Purpose Acquisition Company) could conserve the day.
Experts hypothesized that BuzzFeed would look for more acquisitions, utilizing its additional scale from HuffPost as leverage.
One idea being drifted in media circles is for Peretti, and possibly the Lerer family, to grow the entity beyond its existing size and then turn it to one of the SPACs circling the digital media area..
Ben Lerer’s Group 9 Media, which is backed by Discovery Communications in addition to Axel Springer (which owns Business Insider), had actually previously gone over a merger with BuzzFeed. Whether they will sign up with the acquisition party stays to be seen. Lerer did not respond to a message and BuzzFeed declined to discuss a possible SPAC.
” When it comes to these new digital media company alliances, I do not believe mergers and growing larger are a sign of strength,” Jill Abramson, the former New York Times executive editor and author of the book “Merchants of Truth,” on the news company, told Business Insider. “They signify weakness and the dreadful environment for any media companies that depend upon digital advertisement profits, as both HuffPost and BuzzFeed do.” Join the conversation about this story” NOW VIEW: We evaluated a maker that brews beer at the push of a button
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