BuzzFeed Inc. has sold First We Feast, its food-centered brand behind the popular YouTube interview show Hot Ones, to a group of investors for $82.5 million, ending a months-long search and raising cash to pay down debt.
The new stakeholders include an affiliate of Soros Fund Management, progressive podcast company Crooked Media and Mythical Entertainment, the media company founded by the YouTube creators known as “Rhett and Link,” according to a statement from First We Feast on Thursday.
First We Feast will retain its senior management team, and founder Chris Schonberger will become chief executive officer. Sean Evans, Hot Ones creator and host, will assume the newly created title of chief creative officer. The two men will also retain a stake in the independent company.
“What began as a humble food blog has evolved into a powerhouse multi-platform brand,” Schonberger in a statement. “With new investment, we’re poised to expand into exciting new areas — including new platforms, live events, and talent acquisition — cementing First We Feast as the ultimate destination for pop culture-obsessed audiences.”
The deal arrives as BuzzFeed’s bill for more than $120 million in debt and interest payments came due last week. BuzzFeed acquired First We Feast as part of its 2021 deal for Complex Networks for about $198 million in cash and 2.5 million split-adjusted shares of equity. BuzzFeed will now be operating with a cash balance that’s larger than its total outstanding debt, the company said. The transaction allows BuzzFeed to reduce its outstanding debt to $30 million.
After years of losing money, BuzzFeed’s market capitalization has tumbled to $163 million from a peak of more than $1.5 billion. Former presidential candidate Vivek Ramaswamy amassed an 8.9% stake in the company earlier this year and has called for it to add new board members and hire popular media personalities like Tucker Carlson and Charles Barkley.
BuzzFeed has sought for months to find a buyer for First We Feast and the search seemed to have stalled at times. The company is profitable and generates about $30 million in annual revenue, primarily through brand and licensing deals tied to Hot Ones.
First We Feast has become a juggernaut on YouTube, where it counts more than 14 million subscribers. Known for Evans’s deeply-researched questions, Hot Ones has become an essential celebrity stopover, with recent appearances by Ariana Grande, Chris Hemsworth, Hugh Jackman and others who banter while eating chicken wings slathered in progressively fiery sauce.
The deal adds to Soros Fund Management’s growing media portfolio. Earlier this year, it became the majority shareholder in Audacy Inc., one of the largest radio conglomerates in the US. It also maintains a stake in Crooked Media. –BLOOMBERG
