BuzzFeed on Wednesday sold Complex Networks to NTWRK, an e-commerce company specializing in collectible items rooted in street culture, in a deal that further shrinks the struggling Jonah Peretti-led digital media empire that was once synonymous with virality and the social media age.
The $108.6 million sale of Complex is less than half of the $300 million BuzzFeed paid for the brand in 2021 and came as the company announced it would lay off 16% of its staff ahead of a “planned strategic restructuring” next week to “enhance the company’s profitability” and “reduce centralized costs.”
“The sale of Complex represents an important strategic step for BuzzFeed, Inc. as we adapt our business to be more profitable, more nimble, and more innovative,” said Peretti, the chief executive of BuzzFeed. “This is also an opportunity to unlock greater value for the Complex brand by combining it with NTWRK’s expansive, commerce-driven business.”
The uniting of NTWRK and Complex is, indeed, something of a natural marriage. NTWRK serves as a marketplace for many of the items that Complex covers, such as sneakers. Combined, NTWRK said it hopes to “create the definitive cultural commerce, content, and experiential platform.”
While NTWRK’s acquisition of Complex unites two similar companies that could complement each other from a business standpoint, BuzzFeed’s willingness to part ways with Complex reflects a retreat for the once high-flying digital publisher that sought to redefine the internet.
Digital publishers have struggled in recent years as they navigate brutal industry headwinds, a soft advertising market, plummeting social media referral traffic, and the looming threat of artificial intelligence.
BuzzFeed has been something of an avatar for such struggles among digital publishers. After launching an initial public offering in 2021, the company’s share price has fallen a staggering 98%, trading Wednesday at a perilously low 21 cents.
The collapse of BuzzFeed’s digital empire has veered sharply into public view in recent years as the company has undergone several rounds of cost-cutting and layoffs.
In April, BuzzFeed shut down BuzzFeed News, its award-winning news division that once boasted hundreds of employees and bureaus around the world. The outlet was not shy about its aim to upend legacy news organizations, such as The New York Times and CNN, which had been slow to transition to the digital age.
Recent reports indicate the cost-cutting at BuzzFeed is not over. Reuters reported last week that The Independent is in talks to take control of the company’s UK operations.
BuzzFeed said that selling Complex will allow it to take “meaningful steps toward strengthening its balance sheet and improving liquidity.”
“The changes we announced today will enable an exciting next stage for our company, with increased focus on our iconic brands — BuzzFeed, HuffPost, First We Feast and Hot Ones, and Tasty; a more efficient cost structure and operational model; and the ability to accelerate innovation powered by AI and interactive content formats,” Peretti said. “I look forward to sharing more in the coming months.”
Investors in the NTWRK-Complex deal include Universal Music Group, record executive Jimmy Iovine, Goldman Sachs, and Main Street Advisors.
Universal Music Group will also serve as a strategic partner, working to identify ways in which the new platform can “offer unprecedented opportunities for both music superfans and artists.” The partnership, which signals Universal Music Group is looking for new platforms to collaborate with, is particularly notable given the company’s recent public breakup with TikTok.
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