Layoffs at Byron Allen’s media company this week will affect about 300 employees across its operating divisions, representing 12% of the company’s workforce of 2,500, The Post has learned.
The job cuts at Allen Media — which operates the Weather Channel and owns 12 cable networks and 27 ABC, CBS, Fox and NBC television stations across 21 markets — had previously not seen a major round of layoffs in its 31-year history, sources said.
The comedian-turned media mogul is undergoing a $100 million cost-cutting initiative, sources said.
Earlier this week, Allen Media reportedly enacted job cuts that included Rick Semmler, the popular sports director at CBS station WTHI in Terre Haute, Indiana. Allen has also recently sold some of the network’s broadcasting equipment and leased it back, sources said.
The job cuts come after Allen bid $14 billion in January for Paramount but never signed a confidentiality agreement to study its financials. Paramount instead signed an exclusive agreement with Skydance Media.
Allen last July also bid $3 billion for Paramount’s BET Group, meeting its asking price. But Paramount did not engage with him because he did not have committed financing. In 2021, Allen offered to acquire TV station group Tegna for $8 billion until his financing partner Ares Management changed sides and provided winning suitor Soo Kim with about a $460 million loan to fund the deal.
Media ad spending, where Allen Media, generates more than 60 percent of its revenue, has been declining at the same time the interest rates Allen Media pays on some of its more than $1 billion of debt are rising, sources said.
Now, this week’s layoffs coupled with projected political ad spending in 2024 should give Allen the money needed to buy groups of broadcast stations that are trading at historically low multiples, a source said.
“Allen Media Group is making strategic changes to better position the company for growth that will result in expense and workforce reductions across all divisions of the company,” an Allen Media spokesman said.
“Allen Media Group’s brands continue to perform well and in many areas our revenue growth has greatly outpaced the market. We are aligning these changes to drive future business opportunities and support our growth strategies in our rapidly evolving industry.”
Allen Media, for the moment, is still a distressed company. Its most junior debt presently trades at about 50 cents on the dollar. More senior debt trades at around 90 cents on the dollar. No principal is due until 2027.
Allen Media in the fourth quarter reported generating $83 million in Ebitda, which is down 19% from the prior year. Moody’s in August 2023 forecast that Allen Media would lose $37 million last year and make $60 million this year.
The money it will make in 2024 will now be significantly higher, sources said, perhaps hundreds of millions and give it some breathing room.
The Weather Channel is Allen Media’s largest, most valuable, and most widely distributed cable network, reaching nearly 72 million US households, Moody’s said in the August 2023 report.
The Weather Channel has faced new pressure from Fox’s Weather Network that launched in 2021.
Meanwhile, McDonald’s in February defeated Allen’s $100 million lawsuit, in which he accused the fast-food giant of lying when it pledged to increase national ad spend with black-owned outlets.
