June 13, 2024

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10 years ago, BuzzFeed founder turned down $650 million offer from Disney CEO Bob Iger

BuzzFeed founder Jonah Peretti reportedly rejected Bob Iger’s $650 million offer to buy the company ten years ago. Now, the once hugely successful company is facing the removal of its news department entirely, and laying off 15% of its staff.

Buzzfeed rejected Disney’s offer

Bob Iger, pictured left, is the current CEO of The Walt Disney Company. Jonah Peretti, CEO of Buzzfeed, pictured right. Peretti reportedly turned down the deal offered by Disney in 2013, despite strenuous requests from Buzzfeed chief John Steinberg. according to luckSteinberg even went so far as to beg on his knees to have Peretti take the show.

Poor reception of speech

Peretti initially agreed to the deal. A few months after he accepted the offer, Disney invited him to speak at the filmmaker’s management retreat in front of 250 employees. He is given a prominent place to speak in anticipation of the deal being made as a sort of ‘welcome’ to the company; But the speech did not go as expected.

Peretti gave a “scorching” speech that included negative comment about Mormons and the Jewish population. A Disney HR executive claimed that this kind of implication would make Peretti “a problem”.

According to former BuzzFeed News editor-in-chief Ben Smith, “Peretti has never laughed so much in his life.” “He had a vision of himself having to explain to the internet these suits for the rest of his career while they stared blankly at him and missed his jokes.”

After this speech, Peretti met privately with Bob Iger and broke off the $650 million deal. Iger then claimed that Buzzfeed “will never be worth what it was worth with us”.

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Buzzfeed’s recent failures

In 2021, BuzzFeed advertised successfully, but the outcome was not what its executives expected. Similar to other online businesses, BuzzFeed has faced significant financial setbacks due to a shift in ad spending toward emerging markets such as video and influencer marketing. As of 2022, BuzzFeed had total revenue of about $436 million, but had a net loss of about $201 million.

BuzzFeed announced last week that it was shutting down its Pulitzer Prize-winning news division, which means laying off about 180 employees. That’s roughly 15% of its total workforce. Since then, Peretti has Publicly apologize to his staff for a turn of events. On removing the news section he said:

I made the decision to overinvest in BuzzFeed News because I love their work and mission so much. This has made me slower to accept that the big platforms will not provide the distribution or financial backing required to support premium, free journalism tailored to social media.

Watchman

Smith claims that the decision to turn down Disney’s offer “will go down as one of the dumbest offers in the history of digital media.”

Disney’s total revenue has nearly doubled in the decade since Peretti declined his offer. The Walt Disney Company had just over $45 billion in revenue in 2013, but as of 2022, that’s increased to nearly $83 billion. Despite this growth, Disney is also in the midst of a massive wave of layoffs to cut costs.

What do you think of Beretti’s rejection of this deal? We’d love to see your opinions in the comments below.

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