Marianne Ayala/Insider
- The owner of embattled network Cheddar News is reportedly considering selling the seven-year-old startup.
- NYT's DealBook reported on Monday that Altice USA tapped Goldman Sachs to explore a possible sale.
- It follows months of turmoil, including staff exits and mounting questions about Cheddar's long-term viability.
It had to happen sometime.
Telecom firm Altice USA has reportedly hired the investment bank Goldman Sachs to "help explore strategic alternatives" for Cheddar News, the embattled seven-year-old media startup it acquired for $200 million just four years ago, according to a Monday report from the New York Times' DealBook newsletter, citing "three people with knowledge of the matter."
"Exploring strategic alternatives" is something of M&A Morse code for — looking to make a sale.
NYT reporters Lauren Hirsch and Ben Mullin noted a sale isn't a foregone conclusion and Altice USA could decide not to proceed. Spokespersons for Altice USA did not immediately respond to Insider's request for comment on Monday morning and a spokesperson for Goldman Sachs had no comment.
Altice has had a tough time at the helm of Cheddar, as Insider has chronicled.
Earlier this year, our in-depth investigation — compiled through conversations and interviews with 16 current and former employees, plus leaked emails and audio tapes of private conversations — revealed the turmoil that had been raging inside Cheddar for months. That was in January, after I'd learned about an editorial "identity crisis" under Altice USA, a faltering plan for embracing social-media-inspired content, and internal warnings that Cheddar would miss its profitability targets. Droves of staffers had already headed for the exits, but more would soon follow.
Read more about the behind-the-scene drama at Cheddar.
Since then, the spiral has continued, further depleting the newsroom's ranks and leaving behind a culture of "zero morale," a former employee told me this year. Shows have been pulled from the network's schedule, live programming has been reduced, and teams have been laid off. Insiders have been asking, for months, whether Cheddar is moribund.
In recent weeks, Cheddar's management has undertaken other jarring steps — like letting go of long-time anchors like Baker Machado and Chloe Aiello, and ousting loyal denizens of its newsroom including producers and a veteran office manager, sources exclusively told Insider in June.
Read more about Cheddar's latest cuts that included star anchors and several producers.
Cheddar has drifted far from its original vision
Making a deal for Cheddar won't be easy in a climate where there's market volatility and pressures in the ad sector, and media and telecoms deals have dipped year over year, according to a PwC report.
Unlike the free-flowing spate of dealmaking we saw during the pandemic when capital was cheap and acquirers' inhibitions had dropped, buyers are more cautious in this environment. That means they're likely to have their diligence microscopes close at hand.
Cheddar hasn't released its internal financials, but Altice's US news and advertising revenues were down nearly 14% year over year, according to Altice USA's most recent earnings report in May. Its stock is down about 70% over the past 12 months.
Potential buyers will likely want to review viewership, as well. Cheddar keeps audience metrics close to the vest, but two sources told me earlier this year they'd seen data showing viewership rarely exceeded a few thousands people at a time, or the low five-figures at most.
Given all of that, it makes sense that its owner feels like it has to do something. It seems unimaginable to keep running the network this way.
Throughout the course of my reporting, I've been contemplating Cheddar's origin story and the vision of its founder, Jon Steinberg, a former top executive at BuzzFeed and Mail Online. He envisaged the network as a harbinger of the digital revolution, hoping to harness the disruptive power of the Internet in the mid-2010s to try to breathe a new ethos into the dry, stodgy world of cable business news.
I wonder how Cheddar OGs like Steinberg, who left the company a few years after its sale to Altice, feel watching the drama play out now that Cheddar may be destined to take on the role of a corporate hot potato, potentially being tossed to yet another owner in the coming months.
Cheddar was meant to be special — to unseat the old ways we all got our downloaded on the day's biggest business headlines. Now, its future is reportedly being carved up by investment bankers and bosses at a telecoms company facing other headwinds — like its chairman recently suspending himself amid an ongoing corruption probe in Portugal.
One lesson that can come from Cheddar's recent history is that constant seesawing 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 innovation in media, but who knows? That story may not be finished yet.
Check out Insider's exclusive coverage of the chaos at Cheddar News:
- Inside the turmoil at Cheddar News, where an editorial 'identity' crisis and misfired social-media strategy divided the newsroom and pushed staffers to exit
- In leaked audio, Cheddar bosses address newsroom burnout and outline their goals, but offer no concrete solutions for declining morale and ongoing exits
- Cheddar News pushed its anchors to think and act like influencers, insiders say, with some on-air hosts hiring agencies at their own expense to boost their social-media followings
- Cheddar News has seen so many exits that managers have asked staffers to delay scheduled vacations, while promising that reinforcements are on the way
- Cheddar News laid off a team of respected reporters who once created content for its popular YouTube channel
- Cheddar News cut a number of roles this week, including star anchors Baker Machado and Chloe Aiello. Now insiders are wondering: How long can the network survive?
Are you a Cheddar News or Altice USA insider? Contact this reporter. Reed Alexander can be reached via email at ralexander@insider.com, or SMS/the encrypted app Signal at (561) 247-5758.