Chernin and AT&T Set to Buy Control of Fullscreen YouTube Network

Fullscreen, the YouTube network that has been talking to prospective buyers for months, is ready to make a deal. Sources familiar with the company say it is finalizing a deal to sell a majority stake to Otter Media, the joint venture between AT&T and the Chernin Group.

The deal will value Fullscreen, which says it generates 3.5 billion views a month on YouTube, between $200 million and $300 million, sources say. Last spring, Disney bought Maker Studios, which generates more than 5.5 billion views a month, for $500 million, and could end up paying out up to $450 million more depending on the company’s performance.

The move represents the Chernin Group’s second bet on Fullscreen. In 2013, the company, along with Comcast*, led a $30 million investment round that valued the company at around $110 million.

Sources say Fullscreen CEO George Strompolos, who started the company after working at Google’s YouTube, will continue to run Fullscreen, and will retain a meaningful equity stake.

Representatives for Fullscreen and Otter Media declined to comment.

If the deal finalizes, it will take one of the few companies with a large YouTube presence off the market, which is one of the reasons why prospective buyers — including Yahoo — were interested in the company. Investors are also very interested in Vevo, the music video company co-owned by Universal Music and Sony music.

But Fullscreen, like other companies with a large presence on YouTube, is also trying to figure out how to make money outside the world’s largest video site. Strompolos is reportedly planning to launch his own paid site, featuring some of his network’s most popular stars.

Otter Media is Chernin and AT&T’s attempt to create a group of “over the top” Web media properties, backed by at least $500 million from the telco. Last week, the company announced it was buying Creativebug, a crafting video site, from Demand Media for $10 million.

* Comcast owns NBCUniversal, which is a minority investor in Re/code.

This article originally appeared on Recode.net.

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