Disney Acquires Maker Studios for $500 Million

The deal values the digital media firm at up to $950 million if certain performance targets are met.

Disney has agreed to acquire YouTube network Maker Studios for $500 million, the companies announced Monday. The value of the digital media firm could balloon to $950 million if certain performance targets are met.

Maker will become a standalone operation within Dinsey and will remain based at its Culver City headquarters. It also has operations in New York and London. Maker CEO Ynon Kreiz will report to Disney CFO Jay Rasulo.

Said Kreiz, “Disney is synonymous with the best entertainment and is the ideal partner for us, strengthening our position as the leading player in online video.”

Maker was founded in 2009 as a multichannel network for YouTube talent. The company has grown into an online video network with more than 55,000 YouTube channels with a combined 380 million subscribers. It consistently ranks among the top five YouTube partners according to comScore and works with talent such as Swedish video gamer PiewDiePie and singer Mike Tompkins.

Maker has raised $66 million in venture capital funding in the last five years, including a $36 million round led by Time Warner Investments.

“Short-form online video is growing at an astonishing pace and with Maker Studios, Disney will now be at the center of this dynamic industry with an unmatched combination of advanced technology and programming expertise and capabilities,” said Disney CEO and chairman Robert Iger.

Recently, Maker has been looking to expand beyond its YouTube roots. The company acquired startup video network Blip in September 2013, ostensibly to develop a distribution platform of its own. The company also recently began partnering with celebrities to develop original content. In January it announced a deal with  will.i.am to launch an online video platform with original programming drawn from the musician's interests. 

The deal is expected to close during Disney's fiscal third quarter.