Chernin, AT&T Close to Taking Majority Stake in Fullscreen
The partners would purchase the YouTube network through their Otter Media investment entity.
Peter Chernin and AT&T are close to purchasing a controlling interest in the YouTube network Fullscreen for a price in the neighborhood of $200 million to $300 million, sources familiar with the negotiations confirmed Wednesday.
The purchase would be made through Otter Media, an investment vehicle that the Chernin Group and AT&T said in April was created with the intention of investing at least $500 million in new-media video entities.
The Chernin Group, in fact, is already a stakeholder in Fullscreen, having participated a year ago in a $30 million round of funding, which at the time valued the Los Angeles-based firm at $110 million.
Otter's interest in Fullscreen was first reported by the tech blog Re/code. The investment firm recently acquired crafting website Creativebug from Demand Media for $10 million. It also owns a majority stake in the Japanese animation site Crunchyroll.
Fullscreen is run by former YouTube executive George Strompolos; it has been rumored to be a takeover candidate ever since Walt Disney purchased Maker Studios in a deal worth $500 to $950 million, depending on the accomplishment of certain goals. Yahoo, NBCUniversal, Time Warner and Relativity Media were all reported to be circling the company.
Fullscreen generates roughly 3.5 billion monthly video views, while Maker is at about 5.5 billion, according to Re/code. In addition to its YouTube network, which boasts more than 418 million total subscribers, Fullscreen develops technology tools for content creators and operates a management division run by former CAA agent Larry Shapiro.
Fullscreen's talent ranges from comedian Grace Helbig, who has more than 1.8 million YouTube subscribers, to vlogger Connor Franta, who boasts nearly 3 million subscribers. The company has also started to work with Vine stars.