Byron Allen draws ire of ABC, CBS and NBC over late payments

Broadcasting stations owned by Byron Allen, the media mogul who has publicly expressed interest in buying several media assets for billions of dollars, have consistently fallen behind on payments to network owners, angering media allies and creating distance between Allen and potential business partners, CNBC has learned.

Stations owned by Allen Media Group are up to 90 days behind on payments to networks including ABC, CBS and NBC, according to people familiar with the matter. The payments total tens of millions of dollars over the year and the degree of delay has worsened 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 including ABC, CBS and NBC affiliates, according to the group's website.

ABC, CBS and NBC have grown increasingly frustrated after what seems like a perpetual chase for fees, even after agreeing to payment plans at Allen’s request, the people familiar with the matter said. Consistently paying late is uncommon among local broadcasters, which pay large sums to the owners of the largest networks to carry branding and some content, particularly live sports like the NFL and many postseason games across all leagues, the people said.

It is unclear why Allen Media Group has repeatedly delayed payments.

After CNBC reached out to Allen Media for comment this week, the group made a payment for the outstanding fees, according to people familiar with the matter. The amount of the payment could not immediately be determined.

Networks typically charge their local affiliates fees every one to three months, depending on the contract. The funds to pay them come largely from so-called retransmission fees that cable TV operators pay stations, which can create a situation where money may have to go out before it comes in. Recently, executives at broadcast station groups have argued that this structure should change as cord-cutting accelerates and networks move more of their content to streaming platforms.

Several divisions of Allen’s company, including stations in markets across the Midwest, Southeast, West Coast and Hawaii, have also reportedly seen layoffs in recent months. Another round of staff cuts is expected in late August, one of the people familiar with the matter said.

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

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

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

Allen’s late payments of tens of millions of dollars stand in stark contrast to his frequent multibillion-dollar bids for media assets. In recent years, his pursuit of deals that have not panned out has led investment bankers and financial institutions to lose faith in Allen as a serious buyer of big assets, according to three investment bankers and a person familiar with the matter.

Allen’s recent M&A interests include a $30 billion bid for Paramount Global earlier this year, a $10 billion offer for ABC and other Disney networks last year, and a reported $3.5 billion bid for Paramount’s BET Media Group, which he resubmitted in December after the process ended.

There was also a recent report that Allen is considering another offer for Paramount before his “deal-seeking” period with buyer Skydance expires at the end of this month.

Allen has been vocal about his ambitions to increase his media holdings, defending his history of failed bids and telling CNBC in January that recent takeover attempts had failed because some owners ultimately decided not to sell.

“We have a number of banks that are behind us and behind us, and even private equity firms,” ​​Allen told CNBC in September of the potential deal for ABC and other Disney assets. “I think other assets will start to become available and I think we'll eventually get them.”

Allen Media Group has begun posting on its own website public media reports about its interest in bidding for media properties, including unconfirmed reports of interest, such as a reported $8.5 billion bid for Tegna.

Formerly a comedian, Allen founded Entertainment Studios, now known as Allen Media Group, in 1993. In 2019, Allen Media Group Broadcasting was formed and Allen has since been building his broadcast media empire with a series of smaller deals.

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

Most recently, in April, Allen Media paid $380 million to Grey television for seven stations as part of the divestitures required by Gray for its acquisition of Quincy Media.

Allen's broadcast stations generate revenue, like most others, through advertising revenue and so-called retransmission fees — payments the stations receive from pay-TV operators for the right to carry their signal. But broadcast station groups have also suffered as millions of people have switched from traditional TV to streaming.

A record surge in political advertising is expected ahead of the presidential election as some of the largest broadcast station owners such as Nexstar Media Group and Sinclair They have documented this in recent earnings releases.

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