Byron Allen angers ABC, CBS, NBC over late payments – Business News (Trending Perfect)

Broadcast stations owned by Byron Allen — the media mogul who has publicly expressed interest in buying various media assets for billions of dollars — have been consistently late in making payments to network owners, angering media allies and creating distance between Allen and his potential deal partners, CNBC has learned.

Stations owned by Allen Media Group have been up to 90 days behind on payments to networks including ABC, CBS and NBC, according to people familiar with the matter. The payments have totaled tens of millions of dollars over the course of the year, and the extent of the delay has grown over time, said the people, who asked not to be identified because the financial transactions are private.

Allen Media Group owns broadcast stations in more than 20 markets among ABC, CBS and NBC affiliates, according to the group's website.

ABC, CBS and NBC have all grown increasingly frustrated with what appears to be a perpetual chase for fees — even after agreeing to payment plans at Allen’s request, people familiar with the matter said. The people said the persistently late payments are not uncommon among local broadcasters, which pay exorbitant sums to larger network owners to carry branding and some content, particularly live sports like the NFL and many postseason games across leagues.

It is unclear why Allen Media Group has repeatedly been late in making payments.

After CNBC reached out to Allen Media for comment this week, the group paid the outstanding fees, according to people familiar with the matter. The amount of the payment was not immediately available.

Networks often collect fees from local affiliates every one to three months, depending on the contract. The money for the payment comes in large part from so-called retransmission fees that cable TV operators pay stations, which can create a situation where it may be necessary to get the money out before it arrives. Recently, executives at a broadcasting group argue This structure should change as cord-cutting accelerates and networks move more of their content to streaming platforms.

Various divisions of Allen Corporation, including stations It is located Across markets in the Midwest, Southeast, West Coast and Hawaii, It is said The company has been experiencing layoffs in recent months, and another round of job cuts is expected by the end of August, one of the people familiar with the matter said.

Representatives for Allen Media Group declined to discuss the details of this story, but said in a statement: “Mr. Allen started Allen Media Group 31 years ago from his dining table. Allen Media Group is now one of the largest and fastest growing privately owned media companies in the world and is 100% Black-owned.

“Like most media companies and private equity firms, we evaluate numerous acquisition opportunities. Over the past few years, the company has successfully completed acquisitions valued at over $1 billion with continued support from the capital markets. Allen Media Group remains strong, and we continue to manage our relationships with partners as wisely as we have throughout our 31-year history,” the statement said.

Representatives for ABC, CBS and NBC declined to comment on the matter.

Allen’s delays in paying his tens of millions of dollars in debt stand in stark contrast to his repeated attempts to buy billions of dollars in media assets. In recent years, his pursuit of deals that have not panned out has led investment banks and financial institutions to lose confidence in Allen as a serious buyer of large assets, according to three investment banks and a person familiar with the matter.

Allen's recent M&A interests include: A $30 billion bid for Paramount Global earlier this year, and a $10 billion bid for ABC and other Disney networks. last yearIt was reported that $3.5 billion offer For Paramount's BET Media Group, which refiled it in December after the deal was completed.

There was also Recent report Allen is considering making another offer for Paramount before the “direct shopping” period with buyer Skydance ends later this month.

Allen has been candid about his ambitions to grow his media holdings, and has defended his track record of failed bids, telling CNBC in January that recent takeover attempts failed because some owners ultimately decided not to sell.

In September, Allen told CNBC: “We have a fair number of banks that are supporting us and standing by us, and even private equity firms. I think other assets will become available, and I think we will eventually get them.”

Allen Media Group has resorted to republishing public media reports on its website regarding its interest in bidding on media properties – even for unconfirmed reports of interest, such as An offer of $8.5 billion has been reported. To Tigna.

Allen was a former comedian and founded Entertainment Studios, now known as Allen Media Group, in 1993. In 2019, Allen Media Group Broadcasting was founded. formedSince then, Allen has begun building his audio and visual media empire through a series of smaller deals.

In addition to The Weather Channel and its broadcast television stations, Allen Media also owns a handful of smaller television networks such as Pets.tv and Comedy.tv, as well as the black news and entertainment network TheGrio.

In April 2021, Allen Media announced paid $380 million gray tv For seven stations as part of Gray's required sale of Quincy Media.

Allen’s broadcasters generate revenue, as do most others, through advertising revenue and so-called rebroadcast fees — payments the stations receive from pay-TV operators for the right to air their programs. However, broadcast groups have also suffered as millions of people switch from traditional television to online streaming.

We are expected to see a record surge in political advertising ahead of the presidential election, as some of the largest broadcasters like Nextar Media Group and Sinclair This has been documented in recent earnings releases.

Disclosure: Comcast's NBCUniversal is the parent company of CNBC and the NBC broadcast network.

Correction: Allen Media Group paid $380 million to Gray Television for seven stations in April 2021. A previous version of this article misstated the timing of the deal.