Altice USA buys streaming-video network Cheddar for $200M
Jon Steinberg, the founder and chief executive of Cheddar, will become president of Altice News, a unit that will include Cheddar as well as Altice’s News 12 channel and i24News, a current-affairs news network.
Mr. Steinberg said he would be reinvesting some of the deal proceeds into Altice USA stock as a sign of commitment to integrating his company into its new owner. He declined to provide specifics.
Dexter Goei, the chief executive of Altice USA, said the deal came together in the past six weeks as both leaders discussed the possible upsides of a tie-up. Cheddar’s relationship with Altice dates back to 2017, when the cable distributor invested in Cheddar.
“We’ve been dancing around this for the last couple of years,” Mr. Goei said. “The reason why I didn’t pull the trigger in the last couple years is because I wanted Jon to prove out the model he’s been building.”
Since its founding in 2016, Cheddar has become ubiquitous on streaming services including The Roku Channel, Hulu, Amazon.com’s Twitch, and so-called “skinny” bundles such as Dish Corp.’s SlingTV and Philo Inc. Cheddar’s strategy of negotiating to obtain carriage on a variety of platforms without charging affiliate fees, has allowed its distribution to grow quickly.
Cheddar has also struck deals with traditional cable providers. Earlier this year, Cheddar launched on Spectrum cable in New York as a stand-alone channel. The company’s biggest revenue stream is advertising.
Altice USA expects the acquisition to grow the company’s revenue and profitability.
News12 Networks, Altice’s most-viewed network on its Optimum TV lineup, has seven 24-hour local news channels in the New York tri-state area. The News 12 channels were part of Altice’s $10 billion acquisition of Cablevision Systems Corp. in 2016.
After Altice invested in Cheddar in 2017, the News 12 channel began including Cheddar content in its broadcasts. Later, Cheddar content was included on i24News, which airs from New York City, Tel Aviv and Paris, and i24 anchors began to make guest appearances on Cheddar as part of the partnership.
By 2018, Cheddar was available as a streaming app as part of the Altice One platform, which combines video, internet, Wi-Fi and streaming apps—giving all subscribers free access to Cheddar’s content.
Mr. Steinberg, the former president and chief operating officer of BuzzFeed, is a familiar sight on Cheddar, offering financial analysis and conducting interviews on the video network. In recent years he has pulled back from on-air appearances, focusing on operating the business.
Aside from Altice, Mr. Steinberg’s Cheddar in recent years has raised rounds of venture capital from numerous investors, including Comcast Corp.’s venture-investing arm, John Malone’s Liberty Global PLC, and Goldman Sachs Group Inc., among others.
Cheddar’s channel is also available on Comcast Corp.’s Xfinity X1 and Flex services.