Disney tried to buy Buzzfeed but talks broke down over price; Buzzfeed sought more than $1B
Disney tried to buy BuzzFeed — The merger conversations happened several months ago, but fell apart over price. — FORTUNE - The Walt Disney Co. was in talks to acquire online content …
Context & Ripple Effects
The failed talks land three weeks after Disney closed its $500 million Maker Studios acquisition, its biggest bet yet on online video — a deal that reporting showed came with $2-3M in monthly losses at Maker. Against that baseline, BuzzFeed's ask of more than $1 billion priced the social publisher at roughly double what Disney paid for an entire multi-channel network.
The story traveled unusually wide for an aborted negotiation — pickups at the Wall Street Journal, New York Times, Business Insider and Mashable all within a day — because it puts a public number on the valuation gap between old media buyers and new media sellers. It also fits a pattern: Disney has been shopping its digital portfolio for months, including unresolved talks with News Corp over Hulu's ownership.
First-order effects
- Disney exits the deal holding Maker Studios, not BuzzFeed, as its vehicle for reaching young audiences — and keeps roughly half a billion dollars of unspent acquisition capacity.
- BuzzFeed remains independent above the $1B mark it set for itself, betting its news and video expansion can justify that valuation without a strategic parent.
Second-order effects
- Other potential acquirers now have a reference price: if Maker's $500M sets the floor for YouTube-scale video assets, BuzzFeed's $1B-plus ask forces any rival buyer to decide which side of that spread digital publishers actually sit on.
- BuzzFeed needs standalone revenue growth — its native advertising and video push, including the CNN-YouTube channel partnership launched in 2013 — to close the credibility gap between its self-assessed value and what big media will pay.
Third-order effects
- If the pattern holds, digital media consolidation splits into two tracks: distressed or break-even networks selling near operating value (the Maker path) and high-growth publishers holding out for premium multiples they may only realize through staying independent or going public rather than selling to legacy media.
The trend: Legacy media's digital acquisitions are being priced off YouTube-network economics while social publishers benchmark themselves against consumer-internet valuations, leaving a widening price gap that stalls deals.