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Disney to buy YouTube network Maker Studios for $500 million

Disney to buy YouTube network Maker Studios for $500 million
Peter Shukoff, right, and Lloyd Ahlquist, creators of "Epic Rap Battles of History." (Kirk McKoy / Los Angeles Times)

Walt Disney Co. is buying Maker Studios, the digital media company behind YouTube successes such as "Epic Rap Battles of History" and PewDiePie.

Burbank-based Disney said Monday that it will pay $500 million to Maker shareholders. Based in Culver City, Maker Studios has about 55,000 YouTube channels with 380 million subscribers and 5.5 billion views per month. 

Shareholders could receive up to $450 million more, depending on Maker's performance after the acquisition. Maker, founded in 2009, is best known for its videos aimed at millennial viewers, who increasingly go online for video entertainment.

“Short-form online video is growing at an astonishing pace and with Maker Studios, Disney will now be at the center of this dynamic industry with an unmatched combination of advanced technology and programming expertise and capabilities,” Bob Iger, Disney's chairman and chief executive, said in a statement. 

After the acquisition, Maker will report to Disney's chief financial officer, Jay Rasulo. The company, which has about 300 employees, will remain headquartered in Culver City and maintain operations in New York and London.

The deal is expected to close during Disney's third fiscal quarter.

“Disney is synonymous with the best entertainment and is the ideal partner for us, strengthening our position as the leading player in online video,” Maker CEO Ynon Kreiz said in a statement.

Last year, Maker completed a $26-million round of series-C funding, adding to an earlier raise of $36 million in late 2012.

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