Job cuts at Byron Allen’s media company this week will affect about 300 employees, or 12% of the company’s 2,500-strong workforce, the Post reported.
The layoffs at Allen Media, which operates the Weather Channel and owns 12 cable networks and 27 ABC, CBS, Fox and NBC television stations in 21 markets, are the first in the company’s 31-year history, people said. To date, there have been no large-scale layoffs. .
The comedian-turned-media mogul is pursuing a $100 million cost-cutting plan, people familiar with the matter said.
Earlier this week, Allen Media reportedly enacted layoffs. Among them was Rick Semler, popular sports director at CBS station WTHI in Terre Haute, Indiana.. Mr. Allen recently sold and leased back some of the network’s broadcast equipment, people familiar with the matter said.
The layoffs come after Mr. Allen made a $14 billion bid for Paramount in January but did not sign a non-disclosure agreement to investigate the financials. Instead, Paramount signed an exclusive deal with Skydance Media.
Allen also made a $3 billion bid for Paramount’s BET Group last July, meeting his offer. But Paramount wouldn’t do a deal with him because he hadn’t committed to funding. In 2021, Mr. Allen sold television station group Tegna for $8 billion until his financing partner Ares Management switched sides and provided winning Soo Kim with a loan of about $460 million to finance the acquisition. I offered to buy it.
Media ad spending, which generates more than 60% of Allen Media’s revenue, has declined, according to people familiar with the matter, while interest rates Allen Media pays on some of its more than $1 billion in debt have also increased. There is.
This week’s layoffs and expected political ad spending in 2024 should give Mr. Allen the cash he needs to buy the broadcasting group, which is trading at a historically low multiple, the people said. said.
A spokesperson for Allen Media said: “Allen Media Group is making strategic changes to better position the company for growth, resulting in lower costs and headcount across all divisions of the company. will be reduced.”
“Allen Media Group’s brands continue to perform well and our revenue growth is well ahead of the market in many areas. We are committed to driving future business opportunities and growing in a rapidly evolving industry. We are adjusting these changes to support our strategy.”
For now, Allen Media remains in financial trouble. The company’s most junior debt currently trades at about 50 cents on the dollar. More senior bonds are trading at about 90 cents on the dollar. There is no deadline for principal repayment until 2027.
Allen Media reported generating Ebitda of $83 million in the fourth quarter, down 19% year over year. Moody’s predicted in August 2023 that Allen Media would make a profit of $60 million this year after losing $37 million last year.
Revenue will rise significantly in 2024, likely in the hundreds of millions of dollars, giving the company more headroom, the people said.
Moody’s said in an August 2023 report that the Weather Channel is Allen Media’s largest, most valuable and most widely distributed cable network, reaching approximately 72 million U.S. households. Ta.
The Weather Channel is under new pressure from Fox’s Weather Network, which launched in 2021.
Meanwhile, McDonald’s lost Allen’s $100 million lawsuit in February. The lawsuit accuses the fast-food giant of lying when it promised to increase advertising spending nationally on Black-owned restaurants.
