Hearst Buys 25% Stake in DreamWorks Animation’s AwesomenessTV for $81.25 Million

Publishing company Hearst has acquired a 25% interest in AwesomenessTV, DreamWorks Animation’s digital-focused media division, for $81.25 million, the companies announced Thursday.

For Hearst, the deal will give it entree into the burgeoning world of online video — and help it reach a young audience that’s increasingly consuming content digitally. DreamWorks Animation, meanwhile, will gain a large partner and cash to build out its fast-growing AwesomenessTV business.

The deal gives AwesomenessTV an implied valuation of $325 million — a clear win for DWA, nearly tripling what it paid for the teen-oriented YouTube multichannel network last year. DWA acquired AwesomenessTV in May 2013 for $33 million with an additional $84 million in potential earn-out fees.

Under the pact, Hearst said it will partner with DWA to expand AwesomenessTV’s efforts to enter into new content channels, as well as broaden its audience and expand its geographic reach. In addition, AwesomenessTV will gain immediate access to Hearst’s subscription video-on-demand platform, which ATV expects to use to sell content directly to consumers across multiple formats.

AwesomenessTV CEO and founder Brian Robbins and president Brett Bouttier will continue to lead the company.

Word of a DWA deal with Hearst for AwesomenessTV emerged last month, along with the news of the studio’s merger talks with Hasbro (which eventually fell apart).

“Few companies have built the global audience of millennial females as quickly as AwesomenessTV,” Steven R. Swartz, president and CEO of Hearst, said in a statement announcing the pact. “For us, it’s very important to make a bet on the future of how content is created. Together, in partnership with DreamWorks, we see great opportunity in supporting the consumer media franchise that AwesomenessTV continues to build.”

DWA CEO Jeffrey Katzenberg said, “This is an extremely exciting partnership for AwesomenessTV and DreamWorks as we continue to implement our long-term strategy to maximize the value of our content and properties through multiple distribution platforms.” He lauded Hearst’s position with “outstanding global brands, a very valuable international presence and industry-leading technology” and said DWA teamed with Hearst because of its “demonstrated track record of successfully partnering with media companies and supporting their growth trajectories.”

Hearst’s joint ventures in the entertainment sector include its 50% stake in A+E Networks, with the other half owned by Disney; and its 20% stake in ESPN, also with Disney, which owns the remaining 80% of the sports cable giant. In addition, Hearst has launched the Esquire Network in partnership with NBCUniversal.

Since launching in 2012, AwesomenessTV has grown to be one of the biggest YouTube multichannel networks. The company claims to have an average of nearly 800 million monthly views and a total subscriber base of more than 114 million. Its top YouTube channels include Cimorelli, Miss Glamorazzi, Tyler Oakley, Cameron Dallas and Nash Grier.

“Brian Robbins and Brett Bouttier are democratizing media by enabling young talent to create their own content, be discovered by their peers and then be showcased across AwesomenessTV’s network of channels, as well as television shows and even movies,” said Neeraj Khemlani, co-president of Hearst Entertainment & Syndication and president of Hearst Digital Studios. “It’s socially driven content by teens for teens across every platform.”

Robbins said in a statement, “With this new partnership, we will benefit from Hearst’s deep industry and creative experience as we continue our strong and productive relationship with DreamWorks Animation.”

Hearst and AwesomenessTV already had a partnership for the publisher’s Seventeen teen-girl mag, under which ATV relaunched the property’s YouTube channel. AwesomenessTV is producing all the content for the channel and managing a multichannel network for fan-contributed content, while Hearst handles ad sales.

AwesomenessTV this April acquired Big Frame, a YouTube MCN and talent-management company, for $15 million. The DWA division also has launched a consumer products business; Awesomeness Music, a label formed in partnership with Universal Music Group to sign deals with YouTube music talent; and Awesomeness Ink, a young-adult book publishing imprint for digital stars.

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