Byron Allen’s vision for BuzzFeed, Starz, and beyond

Note: Transcripts are automatically generated from episode audio, and are not fully corrected for spelling, grammar, and formatting.

BYRON ALLEN: Bob, it’s hard to fall off the floor. I like to buy businesses in the lobby and take them to the penthouse. BuzzFeed was on the floor. I picked it up. It’s on the elevator. We are going to be a serious competitor in free streaming video, and I’m taking it to the penthouse. I am going to dominate media.

BOB SAFIAN: That’s Byron Allen, founder and CEO of Allen Media Group, the new lead owner of BuzzFeed and the brash mogul who swooped in to take over Stephen Colbert’s slot at CBS with a show called Comics Unleashed. Byron definitely does things his own way, including how he maneuvers the conversation in this episode. We talk about race in America and how a career as a comedian helps him see the future. He name-drops Jay Leno and David Letterman, Martin Luther King Jr., and Steve Mnuchin, and along the way throws down the gauntlet to YouTube and Netflix. We had our conversation before BuzzFeed laid off 35% of its staff, but his aspirations for the business remain unchanged. I can safely say that we’ve never had a guest like Byron before, so let’s get to it. I’m Bob Safian, and this is Rapid Response.

[THEME MUSIC]

I’m here with Byron Allen, founder and CEO of Allen Media Group. Byron, thanks for joining us.

ALLEN: Bob, thank you for having me on. This is great.

Copy LinkByron Allen on Black-owned media ownership

SAFIAN: I have been looking forward to this conversation. I hear so many varied things about you, especially this year with buying BuzzFeed and taking over Stephen Colbert’s late show slot on CBS. You’re not averse to a little deep water, are you?

ALLEN: I love it, Bob. I love this. Are you kidding me? Come on. I’m a 65-year-old overnight sensation. Come on now.

SAFIAN: You started out as a performer, and you personally host the TV show Comics Unleashed, which is in Colbert’s old spot, but you’re also very much a businessperson. How do we know when you’re joking and when you’re serious? You do make some audacious moves: trying to buy BET or ABC, suing McDonald’s, threatening GM.

ALLEN: You know what? It’s not show business, it’s business show. Right? There are many facets to me, just as there are to everybody. I am a stand-up comedian. That is my first love. I am a creator. I love to create and write, produce, and make television shows. I started doing stand-up when I was 14 years old, in the summer of ’75, with an unknown Jay Leno and an unknown David Letterman, who I’m friends with today, 51 years later. The three of us ended up getting jobs writing jokes for Jimmie JJ Walker, who was on the show Good Times. Jay and Dave were getting 200 bucks a week. I was getting $25 a joke. I was thrilled at 14 to get $25 a joke. My first $25 check for writing a joke, I thought I had made it. This is great. I even have that check framed and hanging in my office.

I have made it very clear that, unfortunately, Black-owned media — not to be confused with Black-targeted media — virtually does not exist, and that’s unfortunate. You have to remember, I started the company from my dining room table, where I’m sitting now. I started the company from my dining room table in ’93. And Coretta Scott King was a friend of mine, Martin Luther King’s widow, and I think she’s the true queen of America. Bob, she taught me a lot. She said to me, “Byron, as Black people in America, we had four major challenges. Number one, end slavery. Number two, end Jim Crow. Number three, achieve civil rights.” Then she choked up and said, “Number four, the real reason they killed my Martin: achieve economic inclusion.”

She said, “You know, Byron, they didn’t kill my Martin” — that’s how she referred to him — “over the ‘I Have a Dream’ speech. They killed him over the speech he gave in February of ’68 at Stanford University called ‘The Other America.'” In that speech, he said, “There are two Americas. One America has access to opportunity and economic inclusion and education, and the other America doesn’t. Two Americas will not survive. We must achieve one America or the whole system will implode.” And I said to her, “OK, you’ve done more than enough. It’s for our generation to deal with the fourth and final chapter.” All I said to corporate America is this simple thought, Bob: The greatest trade deficit in America is the trade deficit between white corporate America and Black America. Until we close that trade deficit, we can’t have one America. It starts with economic inclusion for all Americans, especially Black Americans, the furthest left behind. That’s the reason I filed the lawsuits, Bob.

SAFIAN: You created a distinction between Black-owned media and Black-targeted media. And I know those lawsuits were about devoting more of their media budgets to Black-owned outlets.

ALLEN: That’s right.

SAFIAN: But you bought the Black News Channel out of bankruptcy and merged it into TheGrio. Is there a business opportunity in talking to and engaging with Black audiences differently? Is that where there are undervalued properties and audiences, or are these things completely separate?

ALLEN: You should not have a world where we don’t have Black-owned media. We need to control our images. We need to control how we’re produced. We need to control how we’re depicted. Are you OK, Bob, if I control all of media and I control how your white children grow up and see themselves? Will you trust me with that? Can I tell your white children how to think about themselves, how to see themselves, who they are in this society? Are you OK with me having that power and that control over your children’s psychology and self-worth?

SAFIAN: So it sounds like this is as much about a social mission, in some ways, as a business mission. These two things are intertwined for you.

ALLEN: Yeah. I mean, you can bifurcate it. At the end of the day, you want to have control over how you’re seen, produced, and depicted, and how the world sees you.

SAFIAN: Yeah.

ALLEN: Think about that question. You’ve never had to think about that question as a white male. The reason I filed the lawsuits — and I filed $50 billion in lawsuits — is that I watched all of my Black contemporaries go out of business, each and every last one of them. My pathway to victory was, “Hey, guys, I’m going to file these lawsuits. I’m going to invest over 100 million dollars in legal fees. We’re going to go all the way to the Supreme Court.” After I started that process, we came to a peaceful resolution and a good understanding. I put a $10 billion lawsuit on your table. Now what I’m saying to you is, get to the table and treat me with the same respect I treat you.
I’m the first Black person to come along in the history of America with that conviction, with that commitment, with those resources, to say, “All I’m really trying to do here is get to one America. That’s all I’m doing, Bob. You’ve never had anybody like me on this show break it down for you like this. We got a lot to talk about, Bob. I’m so happy about this call. Let’s do it.”

Copy LinkInside Byron Allen’s takeover of Colbert’s late-night slot

SAFIAN: So I want to ask you about this in the context of your takeover of this CBS late-night slot.

ALLEN: Yes, sir.

SAFIAN: Which, in some ways, was full circle for you.

ALLEN: Yes.

SAFIAN: But the opportunity came courtesy of Colbert getting ousted by Paramount, which some people considered politically motivated as a way to curry favor with President Trump. Does that kind of context dampen things for you at all? If you’re trying to build one America, is that in service of that? Or is it an opportunity that’s like, “Hey, this is a business opportunity. This is something different”?

ALLEN: I like you, Bob. I like you. So here’s the deal: If you accept that it’s business show and show business, then you will accept what was stated publicly. The landscape is changing so rapidly. You literally have to go back to the Industrial Revolution to witness this type of transformation in media. When you think about half of the viewership having moved over to streaming, what happens when the eyeballs shift to another platform, another screen? The ad dollars follow. Holy moly.

SAFIAN: Yes.

ALLEN: That sucking sound you hear, that is money coming out of the ecosystem. So let’s talk about the math. Colbert was costing approximately $110 million to produce. The publicly traded company, Paramount Global, stated they were losing 40 million a year. I went to CBS and I said, “What I will do is buy the time period from you. I will pay you a handsome sum for that time period, Monday through Friday. I will put in a show that I created 20 years ago called Comics Unleashed With Byron Allen, where I have four comedians per night, and all we do is make you laugh.” When I started taping the show 20 years ago, Bob, I said then, “Hey, comedians, listen up. You’re not going to say anything political. You’re not going to say anything racist. You’re not going to say anything sexist. You’re not going to say anything antisemitic. You’re not going to say anything homophobic. You’re going to be funny, and you’re going to do it in a way where you’re not offending people. We’re in their homes.”

I said that 20 years ago, Bob. Well, guess what? Twenty years later, those shows held up. They announced, “Hey, we’re not going forward with Colbert because we’re losing close to 40 million bucks.” And I said, “Well, here you go. I could save you. If you cancel the show, I’ll save you 40 and I’ll deliver you Comics Unleashed With Byron Allen. Put that on at 11:35, and I’ll deliver you Funny You Should Ask, the comedy game show I created where for every question, there’s a funny answer.” So the two-hour comedy block, Bob, is very successful. It’s doing very well. I said, “I will keep all the commercial time. I will sell the commercial time to advertisers. I will produce the content. I will deliver the content. And now you can save those dollars” — and that’s a lot of money to save in this environment — “and put those resources elsewhere.” Bob, I’m going to tell you right now, you’re going to see this happen quite a bit in network TV.

SAFIAN: Comics Unleashed has half the viewership that Colbert had, and some people call it a ratings disaster. But if I’m hearing you right, you’re saying, “This is a different model,” and that maybe a smaller audience but an easier path to profitability is where late night — and I guess you’re implying regular television all along — has to go.

ALLEN: Bob, I was very fortunate. I’ve had a lot of great mentors in my life, and one of them was a guy named Al Masini. God bless his soul. I met him when I was 19 years old. He created Entertainment Tonight, Lifestyles of the Rich and Famous, and Solid Gold. He taught me a lot. He said to me, “Byron, the more money you spend, the closer you are to a cancellation. Byron, ratings are nothing more than a way to measure how much money we should be paid.” It’s not a ratings disaster because it’s not about the ratings. It’s about the profitability of the time period. I’m going to take you back to what we said at the top: It’s business show, not show business. Don’t ask me what the ratings are. Ask me, “Are we profitable in that two-hour block?” And the answer is not “yes.” The answer is “hell yes.” That’s all that matters, Bob.

SAFIAN: Byron doesn’t lack confidence. He certainly approaches business in a distinctive way. And while I might not agree with everything he says, he’s not wrong that the TV business model is overdue for a reset. So what’s his plan for BuzzFeed? And what does he mean when he says, “Don’t smell it, sell it”? We’ll get into that and more after the break. Stay with us.

[AD BREAK]

Before the break, media impresario Byron Allen talked about taking over Stephen Colbert’s slot at CBS and the role of Black-owned media in America. Now he explains why he bought into BuzzFeed, how he plans to challenge both YouTube and Netflix, and what he means by the phrase, “Don’t smell it, sell it.” Just a reminder that our conversation took place before BuzzFeed laid off 35% of its staff. Byron has declined to comment on the layoffs, with a spokesperson referring us back to an internal memo that states, in part, “BuzzFeed is well positioned for growth.” Let’s jump back in.

Copy LinkWhy Byron Allen bought a majority stake in BuzzFeed

Let me ask you about BuzzFeed. You’ve built a lot of your media business by buying distressed, overlooked assets — the Weather Channel, regional sports networks — and taking advantage of these opportunities. You bought a majority stake in BuzzFeed for $120 million. It’s a business that has struggled for several years. Why? What do you see in BuzzFeed that others don’t value?

ALLEN: Look, really simple. BuzzFeed is phenomenal. BuzzFeed is one of the great original brands, right? Not only BuzzFeed, it’s BuzzFeed. It’s HuffPost. It’s Tasty. Tasty has 174 million social media followers, Bob. Unbelievable, OK? They announced that they were about to run out of money. I’m a firm believer in business as a contact sport, and speed wins championships. So I quickly called them and I said, “Hey, I understand you have some issues here. I’m here to help you get it done. Let’s work on it, and let’s get it done now.” So we cut a deal. No analysis paralysis. Let’s get to it. When I bought into the company, the stock was trading at about 60 to 70 cents a share. Once it got announced, it immediately moved to a buck 40, buck 50. And BuzzFeed is now going to chase YouTube.

When you think about BuzzFeed and the first 20 years of BuzzFeed, it was text. It was written. Advertisers are only paying about a buck 25 CPM for written content, articles, a buck 25. Who cares? It’s a waste of time. We’ll do it. We will definitely do it. I love the written word, but I’m saying it’s a waste of time to invest huge resources when the advertisers are not supporting it.

SAFIAN: Which is what Jonah figured out when he closed BuzzFeed News, right? It was just costing too much money.

ALLEN: And I love having those articles. I want that. I’m going to build on that. I’m going to make it even stronger. I love HuffPost. I love BuzzFeed. We’re going to do some amazing things with Tasty. But we have to get into the video business. A buck 25 for text, video is approximately $30. So I’m here, and I’m able to put BuzzFeed immediately into the video business and chase YouTube. YouTube is—

SAFIAN: Because you’ve already got video from your other properties.

ALLEN: That’s exactly right. YouTube is the biggest streamer on the planet. Why? Two words: free and streaming. The world loves free and streaming. Bob, the two easiest things you will ever sell in your life: free and streaming. So it’s hard to fall off the floor. I like to buy businesses in the lobby and take them to the penthouse. I have no interest in buying a business in the penthouse and taking it to the lobby. BuzzFeed was on the floor. I picked it up. It’s on the elevator. We are going to be a serious competitor for free streaming video, and I’m taking it to the penthouse. And when I get to the penthouse, they’re going to have to add a lot more floors, because I’m going to go beyond the penthouse where it currently sits.

People must remember that the video sitting at YouTube, 99.9% of it, is non-inclusive. Hey, YouTube creators, if your content is sitting at YouTube and you like getting one check, take your content, put it at BuzzFeed, and get two checks. Not a hard pitch, Bob. Not a hard pitch. Day one, I’m going to put over 30,000 movies, TV shows, and documentaries on BuzzFeed. Over 750 FAST channels: People Magazine, Kevin Hart, Johnny Carson, Architectural Digest, and over 400 ABC, NBC, CBS, and Fox affiliates. Super-hyperlocal news, weather, sports, and traffic, geofenced to the user’s ZIP code. I already have that technology with Local Now. I’ve been building it and investing in Local Now since I bought the Weather Channel in 2018.

I have won Best Streamer three times with Local Now, and nobody knows about Local Now. So I have the best technology and the worst branding. Now I’m going to take some of the best branding, BuzzFeed and HuffPost, and marry it with the best technology.

SAFIAN: The snootiest among my colleagues often complain that content quality is going down as access gets ubiquitous, and we’re going to the lowest common denominator as we change these financial models. Does that hold any weight? Are we losing anything culturally in this transition?

ALLEN: I don’t think so. I’ll say to your snooty friends, “Don’t smell it, sell it.” That’s what I’ll say to your snooty friends. Sell it. And Henry Ford said it best: “Opportunity is never lost. Your competitors will always find it.”

SAFIAN: Yes.

ALLEN: If the audience is seeking a higher quality of content, they will find it. They will get it. If they’re fine with what’s being fed to them because it’s new, it’s fresh, it’s different, and it’s people who look like them and sound like them and share things with them that resonate and connect with their way of thinking, that’s the thing. In my humble opinion, Bob, it’s all additive. Nothing’s going away. So quality content will be there. Your user-generated content will be there. And what’s really great is that, because of the way technology is working today, the ad dollars will follow whoever gets Bob’s attention. That’s simple.

SAFIAN: How does Starz fit into this portfolio? You bought over 10% of the shares. You said you intend to take control of it. It’s not free streaming, or at least hasn’t been. How does it fit in with all the other things you’ve been talking about?

ALLEN: I can save Starz. Starz needs to be saved.

SAFIAN: It’s in the lobby. It’s not in the penthouse.

ALLEN: As a matter of fact, I’m starting to think it’s in the basement. Starz is a pure-play, publicly traded streamer. And there’s only one other: Netflix. Netflix is sitting there with a market cap of 300 to 400 billion. When I bought into Starz, I called Steve Mnuchin before he got into politics. He was my banker. And I said, “Steve, I see you own 10.7% of Starz. Do you want to sell it?” And Steve said, “Not at these prices.” I said, “Well, I didn’t give you a price. I just asked you, do you want to sell it?” He said, “Yeah.” I said, “What do you want?” And I think at the time it was trading at like 10 or $11. He said, “I want 13.86 a share.” I said, “How do you get there?”

He explained his breakdown, how he got there, blah, blah, blah. I said, “OK, how much is that?” He said, “25 million.” All right. I bought it. I said, “I’ll send you the money tomorrow. Let’s do it. I’ll take the shares.” And since I bought it, the stock has gone from about 13.86 to about 28 to $32. I knew it was undervalued when I bought it. Once I get control of Starz, and eventually I will get control of Starz, that’s going to be a two- or $300 billion market cap company. That’s going to be the best comedy platform on the planet, and I’m going to go aggressively after sports rights. There’s no brain surgery here, Bob.

Copy LinkWhat setbacks teach about resilience

SAFIAN: Your ambitions are not small, Byron. As you’re talking, I’m thinking about you. I remember you talking about watching Richard Pryor bomb, and he told you, “You’re only as good as you dare to be bad.” And I’m curious: All of us have had our own swings and misses. What do you learn from your misses? Or do you not think of them as mistakes?

ALLEN: I appreciate the misses. I learned from one of my mentors, “Don’t ever invest in anybody who hasn’t been knocked out.” Don’t ever bet on a fighter who has never been knocked out, because they know what they did wrong. They don’t like that feeling, and they know how to avoid it happening again. So it’s good to be knocked down. It’s good to be knocked out. I’ve been knocked down. I’ve been knocked out. And you know what? I’m a better fighter. I know how to protect myself better. Even the greatest—

SAFIAN: But that doesn’t mean you’re not going to keep getting hit, right?

ALLEN: No, it doesn’t mean that. I’m a human being. I am 65. I’ve been doing this since I was 14. Not only do I know what’s coming around the corner, I know what’s coming around the block. I know what’s coming down Highway 10. I know what’s going to happen long before people know what’s going to happen. I know the ebbs and flows of this business because of my upbringing. Remember, there’s no better training than being a comedian. There’s a reason why comedians dominated the movie industry. There’s a reason why comedians dominated radio, dominated television, and now dominate streaming. No one’s more in tune with the audience than us. I made my living. I fed myself standing in front of an audience with a microphone and getting a laugh every five seconds, or not, across the country.

SAFIAN: And you know right away if it landed or it didn’t, right?

ALLEN: Bingo. We know the psychology of human beings better than anyone. Anyone. That’s why no one can beat the comedian.

Copy LinkWhy the audience is forcing a total media reset

SAFIAN: So when you look at the media landscape today, what do you feel like is at stake? Is it healthy? Is it vulnerable? Is it both?

ALLEN: No, I think it’s evolving, and it’s going to always evolve. And I think that it’s a good thing. At the end of the day, the audience is always our boss. That’s our boss, the audience. They’re going to tell you what they want and what they don’t want. Wall Street is the beast. The beast eats its young every 90 days. You must bring them profitability and more blood, more blood, more blood every 90 days, or you get fired. These cable operators kept pushing up cable subscription rates from 10 bucks, 20 bucks, 30 bucks, 150, 250 bucks. Bam. You hit the wall, you’re out. Now you go to streaming for 9.99. You go to YouTube for free. They’re out of touch. If you don’t understand what it means for the average American to spend 1,800 a year, 3,000 a year, you’re out of touch. OK?

SAFIAN: Yes.

ALLEN: So our bosses have spoken loudly, clearly. And they said, “You need to provide me content at prices I’m comfortable with. Hello, Netflix. Hello, YouTube. You gave birth.” That’s why it’s evolving. So the technology is in place where we can provide excellent content at very efficient pricing, if not free. So I think it’s a reset, but I love it. And I remember when I was a kid and I said, “This is what I want to do with my life.” And Bob, the hair went up on my arms. I remember. I remember that unbelievable rush over me, like, “Oh, this is why God put me on this planet. I am going to dominate media.”

SAFIAN: Well, Byron, this was great, as you promised. Thanks so much for doing it.

ALLEN: I’m just having a great time, Bob, and I’m so happy I met you. You’re my new friend, Bob. You’re my new friend.

SAFIAN: I’m pleased to have made friends with Byron, though the layoffs at BuzzFeed do put a damper on things. It’s never easy when 180 or so people lose their jobs. Byron and I don’t see eye to eye on everything, and I’m not sure his achievements will match his ambitions. But at the same time, what he’s attempting is so bold, it’s tough not to pay attention. What sticks with me most may be Byron’s confidence, his apparent certainty across a range of areas. I suppose that moving from the lobby to the penthouse requires some bravado. And in Byron’s own personal story, he’s successfully kept ascending. His leadership style may be different from mine, but all leaders need a measure of assurance, especially in times of change. As I once confessed to my own team, I may be wrong, but I’m never in doubt.

I’m Bob Safian. Thanks for listening.