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

BuzzFeed founder Jonah Peretti reportedly turned down Bob Iger’s $650 million offer to buy the company ten years earlier. Now the once mega-successful company is faced with removing its news division entirely, and laying off 15% of its staff.

Buzzfeed turned down Disney deal

Bob Iger, pictured left, is the current CEO of The Walt Disney Company. Jonah Peretti, CEO of Buzzfeed, is pictured at right. Peretti reportedly refused the deal offered by Disney in 2013, despite earnest pleas from Buzzfeed’s president, Jon Steinberg. According to Fortune, Steinberg even went so far as to beg 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 filmmaker’s management retreat in front of 250 employees. He was given a prominent speaking spot in anticipation of the deal going through as a sort of “welcome” into the company; but the speech did not go as well as expected.

Peretti gave an “edgy” speech that contained negative comments about Mormons and Jewish populations. A Disney Human Resources executive claimed that this kind of inclusion would make Peretti a “problem”.

“Peretti had never had fewer laughs in his life,” according to former BuzzFeed News editor-in-chief Ben Smith. “He had a vision of having to explain the Internet to these suits for the rest of his career as 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 that Buzzfeed “would never be worth what it would be worth with us.”

Buzzfeed’s recent mistake

In 2021, BuzzFeed successfully went public, but the result was not as expected by the managers. Like other online companies, BuzzFeed has faced significant financial setbacks due to the shift in ad spending toward 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 approximately $201 million.

BuzzFeed announced last week that it is closing its Pulitzer Prize-winning news division, which means laying off about 180 employees. That’s about 15% of the entire workforce. Peretti has since publicly apologized to his employees for the course of events. On removing the news division, he said:

I made the decision to over-invest in BuzzFeed News because I love their work and mission so much. This led me to accept that the major platforms would not provide the distribution or financial support required to support premium, free journalism purpose-built for social media.

Guardian

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

Disney’s gross revenue has nearly doubled in the decade since Peretti turned down their offer. The Walt Disney Company generated just over $45 billion in revenue in 2013, but as of 2022, it will rise 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 about Peretti turning down this deal? We’d love to hear your opinions in the comments below.

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