Pop culture brand BuzzFeed is selling the studio behind the popular chicken wing-style interview show “Hot Ones” to an affiliate of Soros Fund Management, the company announced on Thursday.
The affiliate, which wasn’t named, will pay $82.5 million for First We Feast, the company that produces the YouTube series that features celebrities being interviewed while trying different flavors of hot sauce.
BuzzFeed acquired “Hot Ones” and First We Feast through its $300 million acquisition of Complex Networks three years ago. To address ongoing debt concerns, BuzzFeed sold much of the Complex business to shopping company NTWRK earlier this year for around $109 million.
Collectively, BuzzFeed’s investment in Complex and First We Feast earned $191.5 million, resulting in a net loss of $108.5 million, based on the purchase and sale prices of both companies.
In a statement on Thursday, a BuzzFeed spokesperson said the sale of First We Feast continues a strategy at the company of focusing away from “lower-margin content products” like news and entertainment articles in favor of “high-margin, tech-enabled revenue lines” like programmatic advertising and affiliate marketing.
“The sale of First We Feast and continued reduction of our convertible debt marks an important step in BuzzFeed, Inc.’s strategic transformation into a media company positioned to fully benefit from the ongoing [artificial intelligence] revolution,” Jonah Peretti, the CEO of BuzzFeed, said in a statement. “In the coming years, we will continue to invest in our most scalable and tech enabled services, launching new AI-powered interactive experiences, and delivering for our loyal audience and business partners.”
As stated, the comments suggest BuzzFeed will rely less on human editors and writers in favor of AI-driven editorial strategies — using robots to write articles and lists, the latter of which made BuzzFeed popular in the first place.
Those strategies have not fared well for other publishers in the space, including Red Ventures, which published a number of articles on its tech outlet CNET that were written by robots and filled with errors. (Earlier this year, Red Ventures sold CNET for $100 million.)
Also on Thursday, BuzzFeed said it was offering updated guidance to shareholders on its fourth quarter (Q4) of the year, when it expects to earn revenue between $54 million and $58 million, with adjusted earnings before interest, tax, depreciation and amortization (EBITDA) between $4 million and $9 million. Matt Omer, the Chief Financial Officer of BuzzFeed, said the company is on track to deliver year-over growth in programmatic advertising and affiliate marketing revenue.
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Editor’s note: An earlier version of this story incorrectly said BuzzFeed had sold First We Feast for $82.5 billion. The actual sale amount was much, much lower than that.
