Byron Allen, founder, chairman, and CEO of Leisure Studios and Allen Media Group, speaks throughout the Milken Institute International 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 numerous media property for billions of {dollars} — have been constantly 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 overdue on the funds to networks together with ABC, CBS and NBC, in accordance with individuals conversant in the matter. The funds whole tens of thousands and 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, in accordance with the group’s web site.
ABC, CBS and NBC have all grown more and more annoyed after what seems like a perpetual chase for the charges — even after agreeing to fee plans at Allen’s request, the individuals acquainted stated. Paying constantly late is rare 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 fee on the excellent charges, in accordance with individuals conversant in the matter. The quantity of the fee could not instantly be decided.
Networks usually accumulate charges from native associates each one to 3 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 may create a state of affairs the place cash might have to exit earlier than it is available in. Not too long ago, broadcast station group executives have argued this construction ought to change as twine slicing accelerates and networks transfer extra of their content material over to streaming platforms.
Varied 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 deal with the small print of this story however stated in a press release: “Mr. Allen began Allen Media Group 31 years in the past from his eating room desk. Allen Media Group is now one of many largest and quickest rising privately-held media corporations on the earth and is one hundred pc 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 nicely over $1 billion in acquisitions with the continued assist of the capital markets. Allen Media Group stays robust, and we proceed to prudently handle our accomplice relationships as we’ve got at all times achieved over our 31-year historical past,” the assertion says.
Representatives for ABC, CBS and NBC declined to touch upon the matter.
Allen’s enterprise
Allen’s late funds of tens of thousands and thousands of {dollars} stand in stark distinction to his frequent multibillion-dollar bids for media property. In recent times, his pursuit of offers that have not panned out has led funding bankers and monetary establishments to lose religion in Allen as a severe purchaser for big property, in accordance with three funding bankers and an individual near the matter.
Allen’s current M&A curiosity features a $30 billion bid for Paramount International earlier this 12 months, a $10 billion provide for ABC and different Disney networks final 12 months, and a reported $3.5 billion provide for Paramount’s BET Media Group, which he resubmitted in December after the method was ended.
There has additionally been a current report that Allen is weighing one other bid for Paramount earlier than its “go-shop” interval with purchaser Skydance expires later this month.
Allen has been vocal about his ambitions to develop his media holdings, defending his observe document of failed bids and telling CNBC in January that current acquisition makes an attempt had fallen via as a result of some house owners finally determined to not promote.
“We now have fairly just a few banks that assist us and stand with us and even non-public fairness corporations,” Allen informed CNBC in September concerning the potential deal for ABC and different Disney property. “I feel different property will begin to turn out to be obtainable, and I feel we are going to ultimately get them.”
Allen Media Group has taken to reposting public media reviews by itself web site of its curiosity in bidding on media properties — even for unconfirmed reviews of curiosity, equivalent to a reported $8.5 billion provide for Tegna.
Beforehand a comic, Allen based Leisure Studios, now often known as Allen Media Group, in 1993. In 2019 Allen Media Group Broadcasting was fashioned, and Allen has been build up his broadcast media empire since with a string of smaller offers.
Along with The Climate Channel and broadcast TV stations, Allen Media additionally owns a bunch of small TV networks like Pets.television and Comedy.television, in addition to Black information and leisure community TheGrio.
And, in April 2021, Allen Media paid $380 million to Grey Tv for seven stations as a part of Grey’s required divestitures for its acquisition of Quincy Media.
Allen’s broadcast stations generate income, as most different stations do, via promoting income and so-called retransmission charges — fee that stations obtain from pay TV operators for the appropriate to hold their feed. Broadcast station teams, nonetheless, have additionally suffered as thousands and thousands of individuals have switched from conventional TV to streaming.
A document uptick in political promoting is predicted forward of the presidential election, as a few of the largest broadcast station house 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.
Correction: Allen Media Group paid $380 million to Grey Tv for seven stations in April 2021. A earlier model of this text misstated the timing of the transaction.