April 20, 2024

Altice USA Considers Selling Cheddar News: NYT DealBook

  • The owner of the embattled Cheddar News network is said to be considering selling the seven-year-old startup.
  • NYT Marketing Book reported on Monday that Altice USA tapped Goldman Sachs to explore a possible sale.
  • It comes after months of turmoil, including staff departures and questions being raised about Cheddar’s long-term viability.

It had to happen sometime.

Telecommunications firm Altice USA has reportedly hired investment bank Goldman Sachs to “help explore strategic alternatives” for Cheddar News, the seven-year-old media startup it acquired for $200 million just four years ago, according to Monday. a report from the New York Times DealBook newsletterciting “three people with knowledge of the matter.”

It involves exploring “strategic alternatives”. Something of an M&A Morse code for — looking to make a sale.

NYT reporters Lauren Hirsch and Ben Mullin noted that the sale is not a foregone conclusion and that Altice USA may decide not to proceed. Altice USA spokespeople did not immediately respond to Insider’s request for comment Monday morning and a Goldman Sachs spokeswoman had no comment.

Altice had a tough time at the helm of Cheddar, as reported by Insider.

Earlier this year, our in-depth investigation – compiled through conversations and interviews with 16 current and former employees, as well as leaked emails and audio tapes of private conversations – revealed the turmoil that had been going on inside Cheddar for months. That was in January, after I learned of an editorial “identity crisis” about Altice USA, a vague plan to embrace social media-inspired content, and internal warnings that Cheddar would miss its profitability goals. Crowds of staff had already made their way to the exits, but more would soon follow.

Read more about the behind-the-scenes drama at Cheddar.

Since then, the spiral has continued, depleting more newsroom ranks and leaving a culture of “zero mentality,” a former employee told me this year. Shows have been pulled from the network’s schedule, live programming has been cut, and teams have been laid off. Insiders have been asking, for months, if Cheddar is dead.

In recent weeks, Cheddar’s management has taken other steps — like letting go of longtime anchors like Baker Machado and Chloe Aiello, and firing loyal denizens including producers and a veteran office manager, sources told Insider exclusively in June.

Read more about Cheddar’s latest cuts which included star anchors and some producers.

Cheddar has come a long way from its original vision

It will not be easy for Cheddar to market in a climate of market volatility and pressures in the advertising sector, and where the media and telecommunications markets have declined year on year, according to a PwC report.

Unlike the free-flowing range of deal-making we saw during the pandemic when capital was free and buyers’ inhibitions fell, buyers are more cautious in this environment. That means they will likely have their microscopes close at hand.

Cheddar did not release its internal financials, but Altice’s US news and advertising revenue was down nearly 14% year over year, according to Altice USA. latest earnings report in May. Its stock is down about 70% in the last 12 months.

Potential buyers will probably want to review viewers, too. Cheddar keeps its audience metrics close to the vest, but two sources told me earlier this year that it rarely saw data showing viewers higher than a few thousand people at a time, or the low five figures at most.

With all that in mind, it makes sense that its owner feels it has to something. It seems unimaginable to continue running the network like this.

During my reporting, I was thinking about Cheddar’s origin story and the vision of its founder, Jon Steinberg, a former executive at BuzzFeed and Mail Online. He envisioned the network as a champion of the digital revolution, hoping to harness the disruptive power of the Internet in the mid-2010s to try to bring a new ethos to the dry, stodgy world of cable business news.

I wonder how Cheddar OGs like Steinberg, who left the company a few years after it was sold to Altice, feel as they watch the drama now that Cheddar may be destined to take a corporate hot potato, which could be tossed to another owner in the coming months.

Cheddar was meant to be special — to ditch the old ways we’ve all gotten to download the biggest business headlines of the day. Now, its future is reportedly being carved out by investment bankers and executives at a embattled telecommunications company – like the recent suspension of its chairman himself. ongoing investigation of corruption in Portugal.

One lesson that may come from Cheddar’s recent history is that constant sawing to try to change a brand’s DNA can subject a company and its consumers to whiplash, doing more long-term damage than good. Cheddar’s story is a sad referendum on media innovation, but who knows? That story may not be over yet.

Check out Insider’s exclusive coverage of the chaos at Cheddar News:

Are you a Cheddar News or Altice USA insider? Contact this reporter. Reed Alexander can be reached by email at ralexander@insider.comor SMS/the encrypted Token app at (561) 247-5758.

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