Byron Allen, a media mogul interested in purchasing billions of dollars worth of media assets, has faced backlash due to consistently late payments from broadcast stations owned by his Allen Media Group. These stations, affiliated with major networks such as ABC, CBS, and NBC, have been up to 90 days past due on payments, totaling tens of millions of dollars throughout the year. The lateness of these payments has strained relationships with network owners and has led to frustration among parties involved.
Despite network owners agreeing to payment plans at Allen’s request, the issue of late payments has persisted and even worsened over time. This behavior is considered uncommon among local broadcasters who pay substantial sums to larger network owners for carrying their brand and content, especially live sports such as the NFL games. It remains unclear why Allen Media Group has consistently been late with payments, causing frustration and anger among media allies.
CNBC reports that after reaching out to Allen Media Group for comments on the late payments this week, a payment on the outstanding fees was made. However, the specific amount of the payment was not disclosed. Network fees are typically collected every one to three months, with funds sourced primarily from retransmission fees paid by cable TV operators to the stations. This financial structure can create a situation where payments need to be made before revenue is generated, complicating the cash flow process.
An increasing number of layoffs have been reported within various divisions of Allen’s company, with additional job cuts expected by the end of August. Allen Media Group declined to provide detailed comments on the matter but asserted the company’s significant growth over the years. Despite challenges, they emphasized prudent management of partner relationships and successful completion of acquisitions totaling over $1 billion in recent years, with strong support from capital markets.
Byron Allen’s recent bids for media assets, including a failed $30 billion bid for Paramount Global, a $10 billion offer for ABC and other Disney networks, and a $3.5 billion bid for Paramount’s BET Media Group, have raised concerns among investment bankers and financial institutions. There have been reports of Allen considering another bid for Paramount before a crucial deadline, underscoring his ambition to expand his media holdings. Despite failed attempts, Allen remains vocal about his intentions to acquire more assets in the future.
Allen’s media empire, built on his background as a comedian and founded in 1993 as Entertainment Studios, has expanded with acquisitions such as The Weather Channel, broadcast TV stations, and smaller TV networks like Pets.tv and Comedy.tv. His recent purchase of seven stations from Gray Television for $380 million further solidified his broadcast media presence. Allen’s broadcast stations generate revenue through advertising and retransmission fees, but like other station groups, have been affected by the shift to streaming services. The upcoming presidential election is expected to bring a surge in political advertising, benefiting major broadcast station owners.
