IAC to Sell CollegeHumor, Which Will Cut Most of Its Workers
Bloomberg: By Ed Hammond, Nabila Ahmed, and Liana Baker
Barry Diller’s IAC/InterActive Corp. plans to sell CH Media, the parent of CollegeHumor and other digital brands, to the unit’s chief creative officer, in a move that will cause most employees to lose their jobs.
Terms of the sale to longtime CH Media executive Sam Reich were not disclosed in a statement Wednesday. IAC will keep a minority stake in the business, according to a person familiar with the matter.
As part of the deal, the unit will restructure and lay off 100 employees in New York and Los Angeles, leaving the business with around five to 10 people, said the person, who asked to not be identified because the information is private.
“IAC, our parent company, has made the difficult decision to no longer finance us,” Reich said in a statement provided to fans and Bloomberg. “While we were on the way to becoming profitable, we were nonetheless losing money -- and I myself have no money to be able to lose.”
The once high-flying comedy brand, best known for its edgy sketches and satire, is the latest victim of a fast-changing digital media landscape. Sites that rely on video have struggled to get enough advertising revenue, and streaming services such as Netflix Inc. have pushed deeper into comedy in recent years.
“Sam was the best choice to acquire CH Media and define its next chapter,” IAC said in a statement. “The decision places CH Media with an owner who is beloved by fans, passionate about the business and sees a future we believe in.”
IAC has owned CollegeHumor since 2006, when it acquired a controlling stake in its parent company. Founded in 1999, CollegeHumor targets people aged 18 to 49 and has more than 15 million unique monthly visitors, according to its website. IAC acquired a controlling stake in its parent company in 2006.
IAC had been looking to sell the unit since October, Bloomberg previously reported.
CH Media owns Dropout, an ad-free streaming service for comedy videos featuring talent from CollegeHumor.
IAC has been shifting its portfolio to focus on growth areas. It is pursuing a spinoff of one of its biggest moneymakers: Match Group Inc., which owns dating app Tinder. It agreed to buy caregiver marketplace Care.com last month for $500 million, including debt.
IAC owns more than 150 brands and products, including the video-sharing platform Vimeo and the Daily Beast news website. Diller, a billionaire media mogul, is IAC’s chairman.