Byron Allen, founder, chairman, and CEO of Leisure Studios and Allen Media Group, speaks in the course of the Milken Institute World Convention in Beverly Hills, California, on Might 2, 2022.
Patrick T. Fallon | Afp | Getty Photographs
Broadcast stations owned by Byron Allen — the media mogul who has expressed public curiosity in shopping for varied media property for billions of {dollars} — have been persistently late in making funds to community house owners, angering media allies and creating distance between Allen and his would-be deal companions, CNBC has realized.
The stations owned by Allen Media Group have been as a lot as 90 days late on the funds to networks together with ABC, CBS and NBC, based on individuals conversant in the matter. The funds complete tens of hundreds of thousands of {dollars} all year long, and the extent of the lateness has grown worse over time, stated the individuals, who requested to not be named as a result of the monetary transactions are non-public.
Allen Media Group owns broadcast stations in additional than 20 markets between ABC, CBS and NBC associates, based on the group’s web site.
ABC, CBS and NBC have all grown more and more pissed off after what seems like a perpetual chase for the charges — even after agreeing to cost plans at Allen’s request, the individuals acquainted stated. Paying persistently late is unusual amongst native broadcasters, which pay hefty sums to the bigger community house owners to hold the model and a few content material, notably reside sports activities just like the NFL and lots of postseason video games throughout leagues, the individuals stated.
It is unclear why Allen Media Group has been repeatedly late with funds.
After CNBC reached Allen Media for remark this week, the group made a cost on the excellent charges, based on individuals conversant in the matter. The quantity of the cost could not instantly be decided.
Networks usually gather charges from native associates each one to a few months, relying on the contract. The funds to pay come largely from so-called retransmission charges that cable TV operators pay to the stations, which might create a state of affairs the place cash could must exit earlier than it is available in. Not too long ago, broadcast station group executives have argued this construction ought to change as twine reducing accelerates and networks transfer extra of their content material over to streaming platforms.
Numerous divisions of Allen’s firm, together with stations situated throughout markets within the Midwest, Southeast, West Coast and Hawaii, have additionally reportedly undergone layoffs in current months. One other spherical of job cuts is predicted on the finish of August, one of many individuals conversant in the matter stated.
Representatives for Allen Media Group declined to handle the main points of this story however stated in an announcement: “Mr. Allen started Allen Media Group 31 years ago from his dining room table. Allen Media Group is now one of the largest and fastest growing privately-held media companies in the world and is 100 percent Black-owned.
“Like most media corporations and personal fairness corporations, we consider many acquisition alternatives. In the previous couple of years, the corporate has efficiently accomplished properly over $1 billion in acquisitions with the continued help of the capital markets. Allen Media Group stays sturdy, and we proceed to prudently handle our associate relationships as we now have all the time accomplished over our 31-year historical past,” the statement says.
Representatives for ABC, CBS and NBC declined to comment on the matter.
Allen’s enterprise
Allen’s late payments of tens of millions of dollars stand in stark contrast to his frequent multibillion-dollar bids for media assets. In recent years, his pursuit of deals that haven’t panned out has led investment bankers and financial institutions to lose faith in Allen as a serious buyer for large assets, according to three investment bankers and a person close to the matter.
Allen’s recent M&A interest includes a $30 billion bid for Paramount World earlier this yr, a $10 billion supply for ABC and different Disney networks final yr, and a reported $3.5 billion offer for Paramount’s BET Media Group, which he resubmitted in December after the process was ended.
There has also been a current report that Allen is weighing one other bid for Paramount earlier than its “go-shop” period with buyer Skydance expires later this month.
Allen has been vocal about his ambitions to grow his media holdings, defending his track record of failed bids and telling CNBC in January that recent acquisition attempts had fallen through because some owners ultimately decided not to sell.
“We have now fairly a number of banks that help us and stand with us and even non-public fairness corporations,” Allen told CNBC in September about the potential deal for ABC and other Disney assets. “I feel different property will begin to grow to be accessible, and I feel we’ll ultimately get them.”
Allen Media Group has taken to reposting public media reports on its own website of its interest in bidding on media properties — even for unconfirmed reports of interest, such as a reported $8.5 billion offer for Tegna.
Previously a comedian, Allen founded Entertainment Studios, now known as Allen Media Group, in 1993. In 2019 Allen Media Group Broadcasting was formed, and Allen has been building up his broadcast media empire since with a string of smaller deals.
In addition to The Weather Channel and broadcast TV stations, Allen Media also owns a group of small TV networks like Pets.tv and Comedy.tv, as well as Black news and entertainment network TheGrio.
Most recently, in April, Allen Media paid $380 million to Grey Tv for seven stations as part of Gray’s required divestitures for its acquisition of Quincy Media.
Allen’s broadcast stations generate revenue, as most other stations do, through advertising revenue and so-called retransmission fees — payment that stations receive from pay TV operators for the right to carry their feed. Broadcast station groups, however, have also suffered as millions of people have switched from traditional TV to streaming.
A record uptick in political advertising is expected ahead of the presidential election, as some of the largest broadcast station owners like Nexstar Media Group and Sinclair have documented in current earnings releases.
Disclosure: Comcast’s NBCUniversal is the mother or father firm of CNBC and broadcast community NBC.
