Investing in outside online content seems to be a growing trend for many traditional media companies, and sports content can be an important part of that. Vox Media and Buzzfeed, both of which have substantial sports divisions, are the latest to pick up big checks, and they’ve picked them up from Comcast/NBC Universal. Peter Kafka of re/code (owned by Vox) wrote last Wednesday that NBCUniversal had invested $200 million in Vox Media (confirmed by a press release) and was expected to announce that they would also invest $200 million in Buzzfeed; that announcement finally came through Tuesday. Here are the details about the Buzzfeed investment, from USA Today‘s Roger Yu:
The investment from NBCU and our rapidly growing revenue assures our financial independence, allowing us to grow and invest without pressure to chase short-term revenue or rush an IPO,” BuzzFeed CEO Jonah Peretti wrote in a staff memo published on the site.
The companies said they “will also explore strategic partnerships across both organizations in the coming months,” including collaborating on television content, movies, the Olympics and advertising for corporate clients.
With consumers shifting to on-demand viewing and streaming, TV networks are broadening their digital media plans. While BuzzFeed and Vox Media started gaining traffic largely with social media-friendly content and aggregated stories, they’ve expanded their newsrooms to produce original stories and videos to compete with traditional publishers. They’ve also started working directly with corporate advertisers to help create ad campaigns, working as advertising agencies to diversify their revenue sources beyond online ads.
BuzzFeed also announced that it has signed an agreement with Yahoo! Japan to launch BuzzFeed Japan as a joint venture based in Tokyo. “Partnering with them allows us to grow much more quickly in Japan than if we had launched on our own,” Peretti wrote.
And here are the key details on the Vox investment, from Kafka’s post:
The headline for now: The media giant is investing $200 million in Vox Media, at a pre-money valuation of $850 million, according to several sources. Which is another way of saying Vox Media is now worth more than $1 billion, after raising around $300 million altogether. (NBCU owner Comcast had previously invested in Vox Media, via its investment arm Comcast Ventures.)
BuzzFeed, meanwhile, is expected to be worth $1.5 billion after its NBCU investment, which multiple sources say is also $200 million — not the $250 million we had previously reported. We believe that secondary sales are involved in each investment — that is, early investors or employees may be selling shares as part of these rounds.
…Vox Media CEO Jim Bankoff — again, my boss — says that in addition to the NBCUniversal investment, the two companies now have a commercial partnership. That means, among other things, that they will collaborate on digital advertising, will work together on video advertising and video programming, and that you will likely see Vox Media employees more frequently on NBCU-owned networks like CNBC. (Re/code already had and continues to have a news partnership with CNBC).
I asked Bankoff whether Vox Media intended to program an NBCU-owned channel, as Vice Media would like to do with A&E’s H2 channel. “No real comment on that,” he said.
So, NBCU and NBCU parent Comcast now own a substantial part of Vox, which includes (and grew out of) SB Nation. Yes, Vox is much larger than sports these days, covering everything from tech (The Verge) to food (Eater) to real estate (Curbed) to news and politics (the flagship Vox site), but sports is still a big part of what they do, and it will be interesting to see if those collaborations have an effect on SB Nation. This isn’t the Turner/Bleacher Report deal, as NBCU/Comcast haven’t bought the whole company, and they have their own substantial digital sites already (on the NBC front, that includes NBC SportsWorld and ProFootballTalk and the other sites along those lines; on the Comcast front, that includes the sites their regional networks have built and some initially-independent sites they’ve acquired, such as The 700 Level), but it could still have an impact. Collaborations on digital advertising between, say, SB Nation and NBC SportsWorld might be interesting, and if Vox employees start appearing on CNBC more, maybe SB Nation employees will appear on NBCSN more. If there was a NBCU/Vox channel, too, that also might include a SBN component.
The investment in Buzzfeed is also notable, especially considering the amounts of money that site has been making (as reported by Gawker recently). Sports hasn’t been as huge of a part of Buzzfeed as it is for Vox, and the company didn’t grow out of sports, but their increasing editorial investment has partly gone to producing sports content. They’ve built out that section pretty nicely, using the mix of original reporting/commentary and aggregation that’s worked well for them on the news side. As with Vox, NBCU’s investment in Buzzfeed isn’t necessarily about sports, but sports may well prove to be a significant part of it. At the very least, NBCU investing at this scale should help Vox and Buzzfeed be major digital players for some time to come.
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