The Deal: Dreamworks Gets Awesome, Hopes for Hip and Groovy
NEW YORK (TheDeal) -- DreamWorks Animation SKG Inc. agreed this week to acquire YouTube network AwesomenessTV for $33 million in cash, plus contingent performance payments through 2015. Depending on AwesomenessTV's ability to meet undisclosed earnings targets, those payments could raise total consideration for the next-generation media company to $117 million.
AwesomenessTV, described as one of YouTube's "most subscribed-to teen networks," launched in June 2012. It has since signed up more than 55,000 channels, or home pages for AwesomenessTV accounts, while aggregating more than 14 million subscribers and 800 million video views.
Dreamworks shares were rising 3% to $21.30.
Brian Robbins, the founder and CEO of AwesomenessTV, created the concept after noticing his young sons spent a week's vacation watching video on their Macs instead of stationing themselves in front of their hotel room's big-screen television set. The observation so moved him that, despite being a veteran producer of traditional film and TV fare, he took the concept to Google Inc.'s YouTube LLC.
AwesomenessTV took shape quickly, with $3.5 million in funding from such investors as MK Capital and Greycroft Partners LLC. United Talent Agency and law firm Ziffren Brittenham LLP, which both helped Robbins assemble his network's senior management, went on to negotiate AwesomenessTV's deal with YouTube.
On Wednesday, while announcing the acquisition of AwesomenessTV for nearly 10 times its seed money, DreamWorks Animation CEO Jeffrey Katzenberg left no doubt that he planned to tap the skills of its founder for his own animated film studio. "Robbins has an extraordinary track record in creating family content both for traditional and new platforms," Katzenberg said, "and his expertise in the TV arena will be invaluable as we grow our presence in that space."
Moreover, in addition to leading AwesomenessTV, Robbins has been tasked with developing a DreamWorks Animation branded digital family channel -- one that builds on the Shrek studio's entire portfolio of intellectual property, resources and technology. Robbins seemed eager to assume the responsibility, not only calling it an "incredible opportunity" but claiming he couldn't wait to get started.
On coming to terms with DreamWorks Animation, United Talent Agency and Ziffren Brittenham reprised their roles as Robbins' and AwesomenessTV's representatives. The deal they constructed is expected to close later in May.