It’s no secret that Funny or Die has been on the chopping block for awhile, seeking sale despite its ties with big media company Turner Broadcasting. A source close to the company tells me that there had been quite a few hiccups getting the deals done over the last few months since Funny or Die was first rumored to be for sale. And now, VideoInk has learned, from multiple sources, that the deal is close to inked and will likely be done any day now, for roughly $198 million with MTV, which is owned by Viacom.
According to various sources close to the business, the sale price would be accurate with the company’s revenues, and inherent value of the IP including flagship series “Billy on the Street,” which was incubated on Funny or Die and ultimately picked up by Fuse, where it has seen three successful seasons with a fourth on the way with Tru TV. Other IP Funny or Die has on the docket include the “iSteve” film, starring Justin Long, “Funny or Die Presents…,” which aired on HBO, and various other short films in addition to their one off video and creative services business.
So why would MTV/Viacom go for Funny or Die?
Primarily, Viacom knows now is the time to strike to own the comedy space before it’s too late. Over the last year there’s been a land grab for digital video companies, and while Viacom could have seen some benefits to buying an MCN, the reality is that pickings are slim now. The comedy space has proven to be a bullet proof format year after year and Funny or Die has been the king of the category for nearly 10 years now. Other comedy companies in the space that could have also filled the bill would have been CollegeHumor.com, currently owned by IAC, The Onion, which has also made a big push into video, and Jash, the comedy collective founded by Sarah Silverman, Reggie Watts, Michael Cera, and Tim & Eric.
Though we’re hearing that there could be a multi-part deal in place that would also roll up The Onion and CollegeHumor into this acquisition.
Secondly, Funny or Die has the production chops to be a great digital studio arm for the company and its various brands which include MTV, Comedy Central and Spike TV — all of which would seem in line with the Funny or Die audience demo.
And finally, Funny or Die has scaled its creative services business over the last few years. Owning that creative shop could be great benefit for campaigns Viacom brands are already running and could give Viacom-owned companies an extra selling points with its clients.
However, the digital numbers have been on the decline and aren’t nearly as compelling as during Funny or Die’s heyday. The company registered 59 million videos views in February 2015. They also saw a 6% dip in unique visitors from February 2014 to February 2015 (Comscore). One point that has been a likely contributor to a slow down on closing the deal is that the founding team at Funny or Die feel the company should be valued higher despite this decline in numbers and, by extension one would assume, digital ad sales. (Perhaps also a reason Funny or Die has been aggressively recruiting for a chief revenue officer, a post that is said to still remain unfilled.)
We’ve reached out to Funny or Die reps and will update this story as more information becomes available.
*Jocelyn Johnson represented Funny or Die in 2010 and 2011 while working at a boutique PR firm in Los Angeles.