Otter Media, the online-video joint venture between the Chernin Group and AT&T, announced that it has agreed to purchase a majority stake in Fullscreen, one of the largest YouTube multichannel network operators.
Financial terms of the deal were not disclosed. Under the agreement, Fullscreen CEO and founder George Strompolos will continue as chief exec and maintain a "material ownership" stake in the company, while the rest of the MCN's management team will all continue in their roles. Word of talks between AT&T/Chernin and Fullscreen emerged earlier this summer.
Fullscreen, founded in January 2011, works with more than 50,000 content creators -- including such YouTube stars as the Fine Bros., Connor Franta and O2L -- who have an aggregate of 450 million subscribers and generate 4 billion monthly views. The Culver City, Calif.-based company has about 200 employees worldwide.
"Fullscreen's support for content creators, its relationship with YouTube and its passion for delivering entertainment to youth audiences around the world are extremely appealing to us," Peter Chernin, chairman and CEO of Chernin Group, said in announcing the deal.
Chernin Group already was a minority shareholder in Fullscreen, along with Comcast Ventures and global ad agency WPP. Fullscreen had been in talks about an investment or acquisition with others in the last few months, including Relativity Media and Yahoo, according to sources.
"This is a huge win for Fullscreen and our creators," Strompolos said in a statement. "Peter Chernin, Jesse Jacobs and the entire team at The Chernin Group have supported our vision since day one. With AT&T as a strategic investor in Otter Media, we are well positioned to redefine youth media in today's digital-first world. We could not ask for a better opportunity."
The deal is the latest in a flurry of deal activity between traditional media companies and upstart digital-video players -- the biggest so far has been Disney's acquisition of YouTube MCN Maker Studios for $500 million plus as much as $450 million more based on performance targets.
In April, AT&T and Chernin Group announced the formation of their JV, pledging to put up to $500 million toward acquiring, investing in and launching over-the-top video services. As part of the pact, Chernin Group contributed its majority stake in Crunchyroll, an online subscription VOD service focused on anime content. In July Otter Media acquired how-to crafting video site Creativebug from Demand Media for $10 million in cash.
"We are excited to have Fullscreen as an integral part of Otter Media, as this supports our focus on youth-based content," commented Aaron Slator, AT&T's president of content development.
The companies said they expect the deal to close within the next month, subject to regulatory approval. WPP will continue as a strategic shareholder in the company.
© 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC
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