It’s a successful exit for three-year-old Cheddar and its founder and CEO, Jon Steinberg: Altice USA was among the investors in Cheddar, which had raised a total of $54 million in funding. Other investors included Amazon, AT&T, Comcast Ventures, Raine Ventures, Liberty Global, Goldman Sachs, the New York Stock Exchange, Lorne Michaels’ Broadway Video, and Lightspeed Venture Partners.
Cheddar will become part of Altice USA News, the New York-area cable operator’s local news division whose properties include the News 12 Networks (available on to Optimum cable customers) and international and current affairs news network i24News.
Steinberg, a former BuzzFeed exec who founded the company in 2016, will join Altice USA to lead the news division.
“Cheddar has demonstrated an innovative approach to live news while building an engaged audience, solid followership and a strong brand,” Altice USA CEO Dexter Goei said in announcing the deal. “As one of Cheddar’s early investors, we have enjoyed our partnership with Jon and admire the entrepreneurial spirit, energy and smart disruptive mentality that he brings to the news business.”
Cheddar operates two networks — the recently rebranded Cheddar Business, positioned as a CNBC-style financial and business network for millennials, and Cheddar News, which it previously called Cheddar Big News. Cheddar’s linear programming is available to 40 million pay-TV households via pacts with Dish’s Sling TV, AT&T’s DirecTV Now, Hulu With Live TV, YouTube TV, FuboTV, Philo, and PlayStation Vue, as well as on free platforms including Roku devices and Viacom’s Pluto TV. The company says it also generates over 400 million views views monthly on social media.
Altice USA said it expects the Cheddar deal to close in the next two months, contingent on regulatory approvals.
In a statement, Steinberg said, “Our goal is to make Altice News a leader in local, business, national, and international news everywhere as we look to build a live news offering for customers in the traditional pay-TV ecosystem, as well as those looking to a la carte alternative [subscription video-on-demand] services, [virtual internet pay-TV providers], and free systems for their non-news entertainment.”
Cheddar itself spent around $10 million on acquisitions. Last year, in two separate deals with Viacom, it bought RateMyProfessors.com (which has over 5 million users) and MTV Networks on Campus, which Cheddar used to launch CheddarU, a collegiate-focused news network that runs on 1,600 TV screens across 600 U.S. campuses.
In an interview with Variety in January, Steinberg said, “I don’t think our exit is going to be someone writing a giant check for us” — but said it would make sense for Cheddar to become part of a local TV station group or to combine with the news operations of a larger media company.
In 2018, Cheddar generated $27 million in revenue (up from $11 million from 2017), mostly from advertising and branded content, according to Steinberg, who forecast sales to nearly double this year. The startup wasn’t yet profitable but was on track to turn into the black by the end of 2019, Steinberg said in January. Cheddar had about 180 employees at the start of this year.
Cheddar is already an existing Altice USA News programming partner. The operator’s News 12 airs the daily Cheddar Tech Report, and i24News runs top stories from Cheddar as part of its global news coverage.
Altice USA was formed after French telecommunications company Altice bought Cablevision Systems in a $17.7 billion deal in 2016 and merged it with the previously acquired Suddenlink Communications. Altice USA went public two years ago.
Pictured above: Cheddar founder-CEO Jon Steinberg (l.), Altice USA CEO Dexter Goei