BuzzFeed Is Facing a $124 Million Debt Crisis

The digital media company BuzzFeed Inc., which owns BuzzFeed, HuffPost, and the properties Tasty and First We Feast, is facing a potential $124 million debt crisis related to funds it raised in June 2021 to finance its acquisition of Complex Media.

According to the contract governing the deal, the creditors who lent BuzzFeed the money more than three years ago have the right to require the publisher to repurchase the debt, plus interest, beginning Tuesday, Dec. 3. 

BuzzFeed used a portion of the cash generated from its sale of Complex this February to pay down the loan, but it still owes $123.5 million—$118.8 million of principal debt and $4.7 million of accrued interest, according to public filings.

If these creditors demand that BuzzFeed repurchase the loans in their entirety, BuzzFeed would not be able to do so, which could force the publisher to take drastic action to raise the funds or potentially declare bankruptcy.

“We currently do not have sufficient cash on hand or projected cash flows to fund the repayment of the notes,” the company said in its third-quarter earnings report.

BuzzFeed declined to comment on the matter. At the moment, no creditors have filed to demand repurchase. Under an update to the contract made on Oct. 28, BuzzFeed will have five days to repay a creditor once they have submitted their “put notice.” 

What is most puzzling, however, is the lack of communication from the company, according to Robert Berstein, the managing director at the advisory firm JEGI Clarity. With this crucial date approaching and now having arrived, BuzzFeed has yet to offer any guidance to the market as to how it plans to navigate the situation.

“Not having an answer to this problem is somewhat disturbing,” Berstein said. “For them to kick the can down the road like this is atypical.” 

Consider the options

While the situation is serious, BuzzFeed has several options left at its disposal. 

The publisher raised funds in February when it sold Complex for $108 million, and it can sell off other assets to generate further cash. 

Furthermore, the company has floated the sale of its food property First We Feast, which houses the interview series Hot Ones, for $70 million, according to Bloomberg.