BuzzFeed is in advanced talks to sell Complex Networks, the streetwise digital media company behind the popular ComplexCon cultural festival, at less than half the price it paid for the company two years ago, a sign of the industrywide troubles afflicting digital media.
Ntwrk, an e-commerce company backed by LiveNation Entertainment and Main Street Advisors, is close to paying less than $140 million for Complex, according to two people familiar with the deal. BuzzFeed paid about $300 million for Complex in 2021.
Buzzfeed is planning to keep First We Feast, the division of Complex responsible for the popular “Hot Ones” interview franchise, after the transaction, one of the people said. First We Feast, which has racked up billions of views on YouTube, will be a part of Buzzfeed’s portfolio of brands focused on food culture, including the recipe guide Tasty.
When BuzzFeed went public two years ago, it made Complex a centerpiece of its pitch to investors. Complex was reliably profitable, a milestone that had eluded many in the digital media industry, and its portfolio of brands seemed a natural fit for BuzzFeed’s focus on young audiences.
But shareholders haven’t warmed to BuzzFeed’s prospects. Since it went public through a shell company in 2021, the company’s share price has fallen precipitously. The company is now worth about $40 million, a sliver of its 2016 valuation of $1.7 billion.
BuzzFeed reported more than $155 million in debt at the end of June.The company lost $64 million in the first half of this year.
The Information earlier reported BuzzFeed was selling Complex.
As the digital media industry consolidates, many other companies have bought companies at lofty valuations that fell precipitously. Vice Media bought Refinery29 in a deal that valued the company at $400 million; Vice ultimately went bankrupt. Group Nine Media acquired PopSugar in 2019 in a deal that valued the women-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 Complex would represent a major expansion for Ntwrk, an e-commerce company that has attracted prominent backers from the realms of technology, media and sports. Los Angeles Lakers star 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 with his partner Dr. Dre for $3 billion in 2014, is also an investor.
A person familiar with Ntwrk’s strategy said the company plans to integrate Complex with its various business lines, parlaying 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 that draws thousands of hype beasts and sneakerheads every year.