After Maker bid fails, Relativity is in talks to buy rival Fullscreen
Relativity Media has submitted a bid for online video giant Fullscreen and has hired Maker Studios cofounder Danny Zappin to advise them on the deal, TheWrap has learned.
The bid comes just weeks after Relativity failed in its last-minute bid for Maker Studios, which sold to The Walt Disney Company in a deal worth up to $950 million.
Zappin helped build Maker Studios into the largest multi-channel network bringing together thousands of video creators across the globe.
When Disney took Maker off the market, Fullscreen became the largest MCN untouched by a recent frenzy of acquisitions and investments. Relativity is not the only company pursuing it.
“I can confirm that we've received an offer from Relativity,” Fullscreen CEO George Strompolos told TheWrap. “We take all credible offers seriously and this one is no exception. The statements attributed to Fullscreen in this article were not made by us and do not reflect our beliefs.” (Strompolos sent TheWrap this statement Friday afternoon after this story was published.)
Relativity is serious about making a splash in the digital space, and buying a multi-channel network is a popular way of doing that right now. The finance company turned movie studio has blossomed into a much larger media company, operating a successful sports agency and television business.
Fullscreen is expected to command a hefty price for any potential buyer, with a potential Relativity deal pegged between $750 million and $1 billion. Two individuals said stock comprises the majority of Relativity's offer.
An individual familiar with the offer said there “was a less than one percent chance” that Fullscreen would sell to Relativity, citing lack of interest in taking stock in the private company. Strompolos obviously disagrees.
Meanwhile hiring Zappin introduces a wild card into the mix, as he is suing Maker for ousting him as CEO. Relativity is also in talks with Zappin, a polarizing figure in the YouTube community, to join the studio as a senior digital executive. Two other individuals confirmed Zappin is one the forces behind Relativity's bid to buy Fullscreen, a rival network to Maker Studios.
Relativity declined to comment on Zappin or its bid for Fullscreen.
In his lawsuit, Zappin claims his former colleagues conspired against him, and those close to Zappin said he hopes to bring talent from Maker's network to his next venture.
Relativity filed a last-minute bid to buy Maker, but Maker took Disney's offer of $500 million with an earn-out of up to $950 million. Relativity Media CEO Ryan Kavanaugh questioned the structure of Disney's deal in an interview Tuesday, arguing it did not offer enough incentives to talent in the network. Relativity too sees an opportunity to snag talent dissatisfied with their financial gains.
The three-year-old Fullscreen operates a network of more than 15,000 channels, and helps brands and companies such as NBC extend their reach on the world's largest video site.