×
You will be redirected back to your article in seconds

AT&T Buys Out Chernin Group’s Stake in Otter Media

AT&T has acquired the Chernin Group’s controlling interest in Otter Media, the four-year-old joint internet-video venture between the two companies, in a deal reported to be worth $1 billion.

Terms of the deal were not disclosed but AT&T said it did not have a material effect on its first-half 2018 results, which is when the majority of the deal was funded. Analysts valued Chernin Group’s deal to sell its stake in Otter to AT&T at $1 billion, according to the New York Times.

The deal will merge Otter Media’s portfolio — which includes Fullscreen, Rooster Teeth and Crunchyroll — into AT&T’s WarnerMedia unit, formed after the telco closed the Time Warner takeover in June. Tony Goncalves, the former DirecTV exec who was appointed Otter Media’s CEO earlier this year, will continue to run the company, reporting to WarnerMedia CEO John Stankey.

Chernin Group is cashing out of the Otter partnership as AT&T has dramatically expanded its media footprint with Time Warner — and now AT&T wants to tap into internet-native media brands to capture a new generation of consumers and, ideally, amplify the ability of the Time Warner businesses to do the same.

Peter Chernin, CEO of the company that bears his name, said in announcing the deal that the combination of Otter with WarnerMedia will create “a new-era media company, serving customers with every type of content delivered through every possible distribution channel.”

In 2014, Chernin Group and AT&T formed what would later be named Otter Media, with the companies pledging to invest upwards of $500 million in acquiring, investing and launching over-the-top video properties. AT&T had previously held a 49.8% interest in Otter Media.

“We are thrilled to incorporate the Otter Media brands and talent into WarnerMedia,” Stankey said in a statement. “Working with Tony, we look to harness Otter’s expertise in feeding the passion of online audiences to augment our portfolio of digital assets and help us further engage, connect and entertain consumers around the globe.”

Currently, the Otter Media portfolio includes digital-media company Fullscreen, in which AT&T and Chernin Group acquired a majority stake less than six months after forming their partnership. Fullscreen started out as a multichannel network that aggregated YouTube channels and now counts 4,500 creator partners (down from as many as 75,000 three years ago).

Otter Media also includes Ellation, an online subscription video service provider that operates the Crunchyroll anime service — in which Chernin Group had acquired a majority stake for $75 million in 2013 — and VRV, which sells OTT channels a la carte and in a bundle.

In addition, Otter Media runs Rooster Teeth, a digital-content studio and video network geared around original sci-fi and anime-style franchises, as an independent subsidiary. Previously, Rooster Teeth was a division of Fullscreen (which bought it in 2014 following Otter’s investment). Otter also has ownership stakes in studio startup Gunpowder & Sky and Hello Sunshine, a media company founded by Reese Witherspoon.

According to AT&T, Otter Media’s properties currently reach more than 93 million unique monthly consumers and is “on pace” to deliver over 75 billion video views this year. The company’s subscription VOD services have more than 2 million paying customers.

This January, Otter Media bought out the shares in Fullscreen and Crunchyroll that it didn’t already own, as a prelude to AT&T’s full ownership of Otter. AT&T reportedly wanted to move to buy out Chernin Group’s stake in Otter sooner, but the Department of Justice’s antitrust lawsuit seeking to block the Time Warner deal delayed the transaction.

More Digital

  • Kelly Abcarian - Nielsen

    Nielsen Forms Addressable TV Ad Group After Buying Sorenson Media's Assets for $11.25 Million

    Nielsen thinks it has the pieces in place to finally drive up the scale of addressable TV advertising, targeted based on a television household’s profile the way internet ads have been served for years. The media-measurement firm has formed Nielsen Advanced Video Advertising, a new group focusing on developing addressable advertising initially for internet-connected smart [...]

  • Hooq Sets up Filmmakers Guild For

    Hooq Sets up Filmmakers Guild For Second Year of Pilots

    Asian video streaming platform, Hooq is to air five pilot episodes that have emerged from its Filmmakers Guild. The most successful is guaranteed to be produced as a full series and streamed on the platform. Five original selected screenplays were each awarded $30,000 to be made as pilots, which now air from March 1. The [...]

  • Fortnite Battle Royale

    Epic Pulls 'Fortnite' Ads From YouTube After Child Predator Controversy

    Epic Games is no longer running “Fortnite” pre-roll ads on YouTube after it was discovered they were playing on videos alleged predators used to exploit children, according to The Verge. The developer has paused all of its pre-roll advertising, which plays before a video starts on the streaming platform, a spokesperson said. It also reached [...]

  • New Video Shows Off Vive Cosmos

    New Video Shows Off Vive Cosmos VR Controllers

    There’s still much to be learned about HTC’s Vive Cosmos — like release date, specs, and price — but Wednesday the company released a short teaser video giving a slightly better glimpse of the controllers in action. The new controllers look a bit like rival VR headset Oculus Rift’s Touch controller, though reversed in some [...]

  • YouTube logo

    Disney Reportedly Pulls YouTube Ads Over Child-Exploitation Controversy

    YouTube is facing yet another big advertiser backlash, with Disney, Epic Games and McDonald’s among the marketers said to have pulled their ad spending after the Google-owned video platform was accused of facilitating what a critic described as a “soft-core pedophilia ring.” Vlogger Matt Watson, in a Feb. 17 video on his YouTube channel MattsWhatItIs, [...]

  • Samsung Galaxy S10, Galaxy S10+ Unveiled

    Samsung Announces Galaxy S10, Galaxy S10+ Phones

    Samsung officially announced its new flagship phones, the Galaxy S10 and its larger sibling, Galaxy S10+, at its Unpacked press event in San Francisco on Wednesday morning. The new phone features a punch-hole cut-out for its front-facing camera, which allowed the company to use an edge-to-edge screen design without the notch found on the latest [...]

  • Samsung's Galaxy Fold Unveiled at Unpacked

    Samsung Announces Galaxy Fold, a $1,980 Foldable Phone

    Samsung officially announced its new foldable phone, dubbed the Galaxy Fold, at its Unpacked press event in San Francisco Wednesday morning. The device features two screens that unfold to a tablet-sized slate. “We are giving you a device that doesn’t just define a new category, it defies categories,” said Samsung senior vice president of product [...]

More From Our Brands

Access exclusive content