BuzzFeed’s founder Jonah Peretti reportedly turned down Bob Iger’s $650 million offer to purchase the company ten years prior. Now, the once mega-successful company faces removing their news division completely, laying off 15% of its staff.
Buzzfeed Declined Disney Deal
Bob Iger, pictured left, is the current CEO of The Walt Disney Company. Jonah Peretti, CEO of Buzzfeed, is pictured right. Peretti reportedly refused the deal offered by Disney in 2013, despite fervent requests from Buzzfeed’s president, Jon Steinberg. According to Fortune, Steinberg even went so far as to plead on his knees for Peretti to take the offer.
Poorly Received Speech
Peretti initially agreed to the deal. A few months after accepting the offer, Disney invited him to speak at the moviemaker’s management retreat in front of 250 members of staff. He was given a prominent speaking slot in anticipation of the deal going through as a sort of “welcome” into the company; however, the speech did not go as well as expected.
Peretti delivered an “edgy” speech that contained negative commentary about Mormon and Jewish populations. A Disney Human Resources executive claimed this sort of inclusion would make Peretti a “problem.”
“Peretti had never gotten fewer laughs in his life,” according to former BuzzFeed News editor-in-chief Ben Smith. “He had a vision of himself having to explain the internet to these suits for the rest of his career while they stared blankly back at him and missed his jokes.”
After this speech, Peretti met privately with Bob Iger and pulled the plug on the $650 million dollar deal. Iger then claimed Buzzfeed would “never be worth what it would have been worth with us.”
Buzzfeed’s Recent Failings
In 2021, BuzzFeed successfully went public, but the outcome was not as expected by its executives. Similar to other online companies, BuzzFeed has faced significant financial setbacks due to the shift in advertising spending towards emerging markets such as video and influencer marketing. As of 2022, BuzzFeed’s gross revenue was approximately $436 million, but it incurred a net loss of about $201 million.
BuzzFeed announced last week it is closing its Pulitzer Prize–winning news division, which means laying off around 180 staff members. That’s roughly 15% of its entire workforce. Peretti has since publicly apologized to his staff for the turn of events. On removing the news division, he said:
I made the decision to overinvest in BuzzFeed News because I love their work and mission so much. This made me slow to accept that the big platforms wouldn’t provide the distribution or financial support required to support premium, free journalism purpose-built for social media.
Smith claims the decision to decline Disney’s offer “will go down as one of the dumbest in the history of digital media.”
Disney’s gross revenue has almost doubled in the decade since Peretti turned down their offer. The Walt Disney Company generated slightly over $45 billion in revenue in 2013, but as of 2022, it surged to nearly $83 billion. Despite this growth, Disney is also in the midst of a massive wave of layoffs to reduce costs.
What are your thoughts on Peretti turning down this deal? We’d love to see your opinions in the comments below.
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