You will be redirected back to your article in seconds

Warner Bros. Nears Deal to Acquire Machinima

Warner Bros. is close to clinching a deal acquire full control of Machinima, the gamer-and-fandom-oriented digital network in which the studio is already an investor, Variety has confirmed.

News of the advanced talks between WB and Machinima were first reported by The Information. According to a source close to the negotiations, the deal is not done yet but the parties are “very close” to completing an agreement.

Warner Bros.’ buyout of Machinima would value the digital player at less than $100 million, after the studio declined to meet Machinima’s asking price of $150 million (twice its projected 2016 revenue), according to sources cited by the Information. Jefferies is repping Machinima in the deal, per the report.

Reps for Warner Bros. and Machinima declined to comment.

In 2014, Warner Bros. led an $18 million investment in Machinima, one of the first YouTube multichannel networks, which was struggling to achieve profitability at the time. WB then led a follow-on round of $24 million in February 2015. With the funding, Warner Bros. has had the option to acquire Machinima outright.

Other Machinima investors include Google, MK Capital, Redpoint Ventures, Coffin Capital and Machinima founder Allen DeBevoise.

By becoming full owner of Machinima, WB would be able to better leverage Machinima’s young male gamer audience against its major content franchises, such as its DC Comics properties, according to Peter Csathy, founder of investment and advisory firm Creatv Media. “Machinima has its sights set on an originals strategy, and Warner Bros. properties are a great fit here,” he said.

ESports is another area where the two companies can work together: Time Warner-owned Turner has formed competitive video-game venture ELeague with WME/IMG, and Machinima could be woven into that initiative very organically.

Machinima, founded in 2000 before YouTube even existed, shifted its business to capitalize on the rise of viewers on YouTube. But it couldn’t turn the corner financially and was forced to undertake several rounds of layoffs, including cuts last year.

Under CEO Chad Gutstein, who joined Machinima in 2014, the company has made a concerted effort to diversify revenue streams off YouTube, striking several distribution and subscription VOD deals recently.

Machinima operates a network of partners who produce some 100,000 videos per month on YouTube, and in addition to that the digital media firm has boosted its own lineup of original series. Machinima originals include “BFFs,” a comedy drawing on tropes from first-person shooter games; “150 Facts,” focusing on behind-the-scenes info about popular entertainment franchises like Transformers and the Avengers; and “The Bacca Chronicles,” an animated series featuring YouTube star and “Minecraft” specialist JeromeASF.

In August, Machinima announced a deal with Amazon to offer its original programming as an add-on subscription service under the Amazon Channels partner program. It also has deals with Sony’s PlayStation Vue in the U.S., British satcaster Sky, Chinese consumer-electronics firm LeEco, AMC Networks Iberia, and Chinese internet giant Sohu.

In addition, Machinima’s eSports docu-series “Chasing the Cup” aired earlier this year on the CW, and the company has licensed several series exclusively to Verizon’s Go90, including the live-action “Street Fighter: Resurrection” and “Transformers: Combiner Wars,” which debuted Aug. 2 on Go90.

More Digital

  • Nancy Pelosi

    Facebook on Defensive Over Fake Pelosi Video

    Facebook faced growing criticism this week over its decision not to remove a video that was doctored to suggest that House Speaker Nancy Pelosi was intoxicated during a recent public event. The video, which has been viewed more than 2.5 million times, had been slowed down notably, giving the impression that Pelosi was slurring her [...]

  • Little-Black-Mirror-Maia-Mitchell

    Netflix Launching 'Little Black Mirror' Video Series Starring Maia Mitchell, Lele Pons, Rudy Mancuso, Juanpa Zurita and More

    To promote next month’s premiere of “Black Mirror” season 5, Netflix is launching a short video series — “Little Black Mirror,” with a cast that includes an ensemble of Latinx social-media stars. The three “mini-stories,” aimed at Spanish-speaking audiences, are inspired by the tech-dystopian universe of Charlie Brooker and Annabel Jones’ anthology series. “Little Black [...]

  • Twitter

    Twitter Permanently Bans Anti-Trump Krassenstein Brothers, Who Deny They Broke Platform's Rules

    Twitter permanently suspended the accounts of Ed and Brian Krassenstein — progressive political activists famous for trolling Donald Trump and his supporters — with the company alleging the brothers used bogus accounts to amplify their reach on the platform. “The Twitter Rules apply to everyone,” a Twitter rep said in a statement. “Operating multiple fake [...]

  • Snapchat

    Snap in Talks to License Music to Let Snapchat Users Embed Songs in Posts

    Snap wants to up Snapchat’s music game. The company has been in negotiations with music companies including the big three — Sony Music Entertainment, Universal Music Group and Warner Music Group — to license song catalogs for the Snapchat app, according to two industry sources familiar with the talks, confirming a Wall Street Journal report. [...]

  • T-mobile - Netflix - John Legere

    T-Mobile Passes Netflix Price Hike Through to Subscribers

    T-Mobile is getting ready to raise prices for subscribers who have taken advantage of its “Netflix On Us” promotion: The mobile carrier will begin charging existing customers who have participated in the promotion an additional $2 per month to account for Netflix’s recent price increase. Consumers will see their bill go up starting on 6/2. [...]

  • Oona King

    Snap Hires Google Exec Oona King as First VP of Diversity and Inclusion

    Snap continues to fill out the ranks of its revamped leadership team: The Snapchat parent tapped Oona King, most recently Google’s director of diversity strategy and a former member of British Parliament with the Labour Party, as its first VP of diversity and inclusion. King, who starts at Snap on June 11, is also the [...]

More From Our Brands

Access exclusive content