Deal of the Year: Disney’s Nearly $1B Acquisition of Maker Studios

This story first appeared in the Jan. 9 issue of The Hollywood Reporter magazine.

Big media has been testing the YouTube waters tepidly for years, but Disney dove in headfirst when it agreed to acquire Maker Studios for nearly $1 billion in March.

That Disney would pay $500 million up front (with an additional $450 million if performance targets are met) for what began as a digital talent agency has raised eyebrows because YouTube has been criticized as a difficult platform to monetize and Maker reportedly is not profitable, even with billions of monthly views.

But Disney’s endorsement delivers a clear message: Shortform digital video equals opportunity — and recently, Big Frame, Fullscreen and StyleHaul all have been acquired, with Funny or Die, CollegeHumor and The Onion said to be fielding offers. Maker CEO Ynon Kreiz, 49, says his company, typically stocked with nonindustry talent, is benefiting from Disney’s rich brand legacy: “The ability to partner with the best franchises in the world is why Disney was so attractive to us.”

Meanwhile, Disney now boasts a shortform video unit with YouTube expertise. Disney CFO Jay Rasulo, 58, says the companies are not that different. “Over the last 75 years, we’ve used all sorts of means to tell stories,” says the fan of Maker channel Epic Rap Battles of History. “They’re using the newest medium, but they’re storytellers just like us.”

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