The Walt Disney Co to buy Maker Studios for $500 mn

The Walt Disney Co yesterday struck a deal to buy Maker Studios, a leading network of online video content on YouTube, for $500 million.

Under the terms of the deal, Maker Studios shareholders will receive a total of $500 million, and a performance-linked earn-out of up to $450 million if performance targets are met.

California-based Maker Studios is a multi-channel network co-founded by Lisa Donovan, former CEO Danny Zappin, Scott Katz, Kassem Gharaibeh, Shay Carl Butler, Ben Donovan, and Philip DeFranco in 2009.

With more than 55,000 channels, 380 million subscribers and 5.5 billion views per month on Google owned YouTube, Maker Studios is the top online video network for Millennials.

By acquiring Maker Studios, Disney said that it will gain advanced technology and business intelligence capability regarding consumers' discovery and interaction with short-form online videos, including Disney content.

''Short-form online video is growing at an astonishing pace and with Maker Studios, Disney will now be at the center of this dynamic industry with an unmatched combination of advanced technology and programming expertise and capabilities,'' said Disney chairman and CEO, Bob Iger.

''Disney is synonymous with the best entertainment and is the ideal partner for us, strengthening our position as the leading player in online video,'' said, Ynon Kreiz, executive chairman and CEO of Maker Studios. 

Maker Studios will report to Disney's CFO Jay Rasulo. The deal, which is subject to regulatory approvals, is expected to close in Disney's 2014 third fiscal quarter, ending June.