Amita Tomkoria: Thank you. So maybe to switch gears a little bit, Matt, we’ve seen some of the press reports around a potential licensing deal for BuzzFeed in the UK. Could you just discuss the nature of that deal and what we should know about it? Is it material? Just sort of recap that for us?
Matt Omer: Yes, yes, sure. The deal hasn’t closed yet. So we’ll, of course, share more as soon as we’re able to do so. But briefly, we’re in the final stages of an agreement with the independent to license our BuzzFeed UK, Tasty UK, Seasoned and HuffPost UK brands. This is very similar to the strategic partnership we announced last June between our Australia business and Val Morgan Digital, so which employees that support revenue generation in the UK would move over to the independent and BuzzFeed would continue to own the IP, but we essentially earn a share of the go-forward revenues. So under the proposed license, the independent would put its resources behind our brands, across editorial and sales and offer a wider mix of products and media bundling. In terms of materiality, again, it hasn’t closed yet, so we’ll share more as soon as we can on the expected impact to our business.
Amita Tomkoria: Got it. And then, Jonah, back to you just on the topic of TikTok, obviously, with a potential TikTok ban looming? Like what does that mean for BuzzFeed? And maybe more broadly, just with your renewed focus on the owned and operated platforms, like how do you view the role of the social platforms in BuzzFeed’s future?
Jonah Peretti: Yes. So TikTok is obviously, massive in terms of time spent. They don’t send much traffic out to other properties. We don’t get much audience from TikTok, occasionally, some like LinkedIn Bio type stuff, but not much. And they have been among the worst in terms of monetization. So we’ve achieved tremendous scale on TikTok, but we’ve had to build our own monetization by doing branded content and other types of monetization that doesn’t depend on platform revenue from TikTok. So I would say our preference would be or our — when I look at the market, if TikTok is banned, probably that will benefit Facebook, Instagram, Snap, other platforms. And the time spent on TikTok would start to move to a lot of these other platforms.
And some of those other platforms are better monetized and could actually be a benefit to us. And then if TikTok isn’t banned, I think, and continues, I think we — our hope is that they will begin to continue the maturation of their ad products and partnership ability, so that they will get closer to parity with other social platforms in terms of revenue for partners. So either of those outcomes are okay. I would say the current state of affairs is not the best where there’s just this ongoing and fierce battle between these social platforms. And as a result, they’ve kind of stopped focusing as much on how to be good partners to the larger ecosystem. So that’s the main thing. And I guess in terms of the role of platforms, to me, it feels very much in the interest of any platform that achieves enough strength and that has the security that they’re in a strong position for them to partner with as many different types of content creators as possible to make sure that their ecosystem is really strong and that they’re able to aggregate as broadly as possible, and spend money with publishers and creators and have personal content and all the different kinds of content that people love.
And for us, we just don’t want to be in a position where we’re dependent on any of the big tech platforms sort of making the right decisions and being a favorable, friendly place for content companies. The recent history has not been great on that front. But we have seen continued strength in our owned and operated platforms. And even as there’s been decline in outbound traffic from, say, Facebook to BuzzFeed, we’ve seen that the audience is spending more time with us. And the direct audience is a lot more valuable than people who are on an app, clicking to see an article and then kind of clicking away and not spending as much time. And so we really want to have the ability to build amazing products and have an audience that spends as much time with us as possible so that we can spread truth and joy and creativity and delight them.
And then probably most importantly, having an owned and operated business or owned and operated at the core of our business gives us the ability to get more tech leverage as we create content, develop technology and also benefit from new technology revolutions like the explosion in Gen AI that will allow us to continually evolve and improve and change our owned and operated in a way that we couldn’t if we were just having content riding on top of someone else’s platform.
Amita Tomkoria: Great. Thank you so much. We’ve got a time for a couple more questions here. Matt, just pivoting to the debt piece of it and the balance sheet, you talked about the sort of use of proceeds following Complex. How should we think about plans to address what’s still a significant amount of debt remaining on the company’s balance sheet?
Matt Omer: Yes. Like you said, I already touched on earlier. The sale of Complex really enables us to meaningfully reduce our outstanding debt and interest obligations. So again, we eliminated our revolving credit facility, that was about $35 million and also paid down approximately 20% of the convertible note. So roughly $31 million of the $150 million that was outstanding. As it relates to the balance of the convertible note, the unsecured lenders do have an option to call the debt in December this year. However, we expect that we’ll be able to work with them in advance of the date of the call option. In fact, when you look at the proceeds, they agreed to a $31 million or roughly $31 million paydown so that we could direct more of the proceeds from the Complex transaction towards the underlying business to fund the restructuring and optimize working capital.
