Byron Allen angers ABC, CBS and NBC over late payment

CNBC has learned that radio stations owned by Byron Allen — the media mogul who has publicly expressed interest in buying various media properties for billions of dollars — have repeatedly fallen behind on payments to channel owners, angering media allies and driving a wedge between Allen and his potential partners.

Television stations owned by Allen Media Group were up to 90 days behind on payments to networks including ABC, CBS and NBC, according to people familiar with the matter. The payments totaled tens of millions of dollars over the course of the year, and the delays got worse over time, said the people, who asked not to be identified because the financial transactions are private.

According to the group’s website, Allen Media Group owns broadcast stations in more than 20 markets including ABC, CBS and NBC affiliates.

ABC, CBS and NBC have all grown increasingly frustrated after what appears to be a continuing chase for fees — even after agreeing to payment plans at Allen’s request, people familiar with the matter said. Repeatedly delayed payments are not uncommon for local broadcasters, which pay large sums to larger network owners to air their branding and some content, especially live sports like the NFL and many postseason games across the leagues, the people said.

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

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

Networks typically collect fees from local affiliates every one to three months, depending on the contract. The money comes largely from so-called retransmission fees that cable operators pay to stations, which can create a situation where money needs to be spent before it comes in. Recently, broadcast executives have has been debated This structure will change as cord-cutting accelerates and networks move more content to streaming platforms.

Many divisions of the Allen company, including the stations locate across markets in the Midwest, Southeast, West Coast and Hawaii, has also reported has undergone layoffs in recent months. Another round of job cuts is expected by the end of August, one of the people familiar with the matter said.

A representative for Allen Media Group declined to comment on the story, but said in a statement: “Mr. Allen founded Allen Media Group 31 years ago at his kitchen table. Allen Media Group is now one of the largest and fastest-growing privately held media companies in the world and is 100% Black-owned.

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

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

Allen’s delay in paying tens of millions of dollars stands in stark contrast to his frequent multibillion-dollar bids for media assets. In recent years, his pursuit of unsuccessful deals has led investment banks and financial institutions to lose confidence in Allen as a serious buyer of major assets, according to three investment banks and a person familiar with the matter.

Allen’s recent M&A interests include a $30 billion offer for Paramount Global earlier this year, a $10 billion offer for ABC and other Disney networks last yearand a report $3.5 billion offer to Paramount’s BET Media Group, an application he refiled in December after the process concluded.

Also had a recent report that Allen was considering another offer for Paramount before The “go-shop” period with Skydance buyers has expired. at the end of this month

Allen has been vocal about his ambitions to increase his media stake, defending his failed bid and told CNBC in January that recent acquisition attempts had failed as some of the owners ultimately decided not to sell.

“We have quite a few banks that are supporting us and standing by us, even private equity firms,” Allen told CNBC in September about a potential deal for ABC and other Disney assets. “I think other assets will start to become available, and I think we will eventually get them.”

Allen Media Group has reposted public media reports on its own website about its interest in bidding for media properties — even unconfirmed reports of interest, such as Reportedly providing $8.5 billion for Tegna.

Formerly a comedian, Allen founded Entertainment Studios, now known as Allen Media Group, in 1993. In 2019, Allen Media Group Broadcasting was was formedand Allen has since built his broadcast media empire through a series of smaller deals.

In addition to The Weather Channel and its broadcast television channels, Allen Media 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 pay $380 million Gray TV for seven television stations as part of Gray’s forced divestment of Quincy Media.

Allen’s stations generate revenue, like most others, through advertising revenue and so-called rebroadcast fees—payments stations receive from pay-TV operators for the right to air their feeds. But broadcast 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 biggest radio station owners like Nexstar Media Group And Sinclair has been noted in recent earnings reports.

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