Otter Media, the Web video joint venture between AT&T and the Chernin Group, is confirming its deal to buy a controlling stake in Fullscreen, one of the biggest YouTube networks.
This is the transaction we first told you about in July. It will leave Fullscreen CEO George Strompolos in charge of the company he founded a few years ago, and he will continue to own a stake. The sale is supposed to wrap up in the next month; ad holding giant WPP, which invested in Fullscreen earlier, will remain as a “strategic shareholder.”
The deal is likely to value Fullscreen, which says it has four billion monthly video views, between $200 million and $300 million.
Earlier in the year, Disney bought YouTube network Maker Studios, which had 5.5 billion views, in a deal that could ultimately hit $950 million. That sale kicked off a new wave of investor interest in Web video networks, which for now generate most of their eyeballs and revenue on YouTube.
Fullscreen wants to diversify its business by creating a subscription service for some of its most popular acts. Otter Media already owns two other video services that sell subscriptions: Last year, Chernin Group bought control of Crunchyroll, the Japanese animation site, and rolled that business into Otter Media; earlier this year, Otter bought crafting site Creativebug from Demand Media.
Here’s the press release:
THE CHERNIN GROUP AND AT&T’S OTTER MEDIA TO ACQUIRE
MAJORITY STAKE IN FULLSCREEN
Strategic Agreement Will Enhance Fullscreen’s Industry-Leading Position in Youth Media
LOS ANGELES and DALLAS, September 22, 2014 – Otter Media, a venture between The Chernin Group and AT&T*, today agreed to purchase a majority stake in Fullscreen, a global online media company.
As part of the deal, Fullscreen CEO and Founder George Strompolos will continue as CEO and maintain a material ownership stake in the company. Otter Media was established by AT&T and The Chernin Group to invest in, acquire and launch over-the-top (OTT) video services.
Fullscreen, founded in January 2011, works with more than 50,000 content creators who engage 450 million subscribers and generate 4 billion monthly views. Through its relationship with YouTube, Fullscreen is a pioneering force in the global content creator revolution and has been consistently ranked as a leading YouTube partner network.
“Our relationship with George started over three years ago when he launched Fullscreen in our offices. Since then, George and the Fullscreen team have achieved something remarkable – they have built one of the largest online content distribution networks, as well as created a leadership position in youth-oriented video programming,” said Peter Chernin, chairman and CEO of The Chernin Group. “We’re thrilled to be working with him and his management team in this next chapter for the company. 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.”
“This is a huge win for Fullscreen and our creators,” said Strompolos. “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.”
“We are excited to have Fullscreen as an integral part of Otter Media, as this supports our focus on youth-based content,” said Aaron Slator, President, Content Development, AT&T.
Fullscreen’s management team will all continue in their roles in the company.
With more than 200 employees worldwide, Fullscreen is dedicated to empowering the next generation of independent creators wherever they are and on any platform. The company’s robust talent roster includes such stars as the Fine Bros., Connor Franta, O2L, Andrea Russett, Lohanthony, Devin Supertramp and Jack and Jack. They are leading voices in today’s youth culture, complemented by thousands of other Fullscreen creator partners. Fullscreen’s data-driven technology and full suite of creative and monetization services enable creators to become brands and help brands act like creators.
The transaction is expected to close within the next month, subject to regulatory approval. WPP, which had invested in Fullscreen in a round of Series A funding led by The Chernin Group in 2013, will continue as a strategic shareholder in the company.
This article originally appeared on Recode.net.