The Walt Disney Company has competition in their bid for Maker Studios: Relativity Media has lodged in their own offer for the MCN.
In an eleventh hour effort on Sunday, film studio Relativity Media sent a letter to Maker’s board of directors proposing a deal that has the film studio exchanging $500 million in stock for the MCN and up to $400 million further in stock if specific performance targets are met, as reported by the Wall Street Journal. Today, however, Relativity has upped their offer to a potential total of $1.1 billion comprised of an increased base offer of $525 million with a potential $500 million upside. Relativity is also offering a reported $75 million “bonus pool” to reward key talent and staff that don’t currently hold Maker equity.
“Relativity’s proposal fully values Maker Studios while providing its shareholders far more upside potential for growth than the Disney offer.” Relativity said in a statement. “We are confident the Maker Studios board and its shareholders will recognize the full value of the Relativity offer.”
Relativity’s offer comes a day before Maker’s board is set to vote on the MCN’s acquisition by Disney, which former Maker CEO Danny Zappin and three other executives are attempting to delay with an injunction request. Disney said last month that it would purchase Maker for $500 million in cash with up to $450 million in incentives. The Journal reports Relativity’s bid will have no effect on the Disney-Maker deal because they already have a binding agreement in place.
The West Hollywood-based Relativity Media has invested billions in movies and is led by founder and CEO Ryan Kavanaugh, often cited for creating a “Moneyball”-type data model used by Relativity in deciding which movies to finance. Since 2006, Relativity have had a hand in bringing over 200 motion pictures to the silver screen, generating more than $17 billion in box office revenue and earning 60 Oscar nominations for films such as “The Social Network,” “The Fighter” and “Les Miserables.” Kavanaugh was ranked No. 30 on this year’s 40 youngest billionaires worldwide list by Forbes.
Maker Studios has over 55,000 YouTube channels with a combined 380 million subscribers. It has recently looked to expand beyond its core MCN YouTube business model by purchasing Blip and partnering with the likes of Will.i.am, Ben Stiller and Just For Laughs for new content. Network home to arguably the most popular YouTuber in the world, Pewdiepie, Maker was recently ranked the No. 2 YouTube partner ranked by unique video viewers with 30,321 for the month of February.
Disney and Relativity’s interest in Maker is only the latest in Hollywood directing their attention to the investment potential of companies that specialize in online video entertainment. Last year, Dreamworks Animation purchased AwesomenessTV for $33 million; AwesomenessTV in turn purchased MCN Big Frame for $15 million this month. Video game-centric MCN Machinima landed $18 million in investment from Time Warner last month.