Culver City-based Maker Studios will complete a merger deal with the Walt Disney Company
Maker Studios, the producer of web videos and operator of YouTube channels, will complete its $500 million-plus merger with the Walt Disney Company announced three weeks ago -- despite a last-minute rival offer for Maker from Relativity Media valued at $1.1 billion.
"Relativity's proposal fully values Maker Studios while providing its shareholders far more upside potential for growth than the Disney offer," Relativity wrote in a statement. It continued:
Our offer also includes a substantial opportunity for Maker's talent and employees to directly and significantly participate in the long term growth of Relativity should the transaction be completed. Relativity and Maker Studios are natural partners. We both share a commitment to challenging the status quo, breaking down old models that don't work and inventing new ones that do. We are confident the Maker Studios board and its shareholders will recognize the full value of the Relativity offer.
Imeh Akpanudosen/Getty Images for Variety
Executive Chairman of Maker Studios Ynon Kriez (L) and Moderator & Editor in Chief Digital Variety Andrew Wallenstein speak onstage during the Variety Entertainment and Technology Summit at Ritz Carlton Hotel on October 21, 2013 in Marina del Rey, California.
Good morning! Welcome to KPCC's business blog, The Breakdown. Every weekday, our staff compiles a list of interesting business stories in the region.
- Beverly Hills-based Relativity Media makes rival offer to buy digital video company Maker Studios for up to $1.1 billion (Variety). The deal competes with Disney's offer to buy Maker for up to $950 million. Culver City-based Maker Studios has more than 55,000 channels on YouTube with 380 million subscribers (KPCC).
- Lionsgate is expanding its presence on YouTube, by partnering with RocketJump Studios (The Wrap). Reporter Brent Lang says the alliance will help Lionsgate get access "to 6.8 million subscribers and nearly a billion views across all platforms."
- Time Warner Cable and the Dodgers executives accuse DirecTV of being "selective in offering the SportsNetLA feed as part of its 'Extra-Innings' package" (Los Angeles Times). The tension comes as DirecTV and other distributors haven't come to a deal with Time Warner Cable and the Dodgers to air the games (KPCC).
- Pratt & Whitney is considering leaving San Diego, where the company makes auxiliary power units for aircraft (U-T San Diego). Reporter Jonathan Horn says Pratt & Whitney employs 530 people and says moving may help it become more competitive in the marketplace.
- The Los Angeles Register launches on Wednesday (Orange County Register). Media consultant Ken Doctor tells reporter Mary Ann Milbourn it could "take up to three years for the Los Angeles Register to make even minor inroads into the market." The Register's parent company has been expanding its distribution, including to desert communities like Palm Springs, earlier this year (KPCC).
- Forget the beach. Over the weekend, 1,300 people went to UCLA for the nation's largest hackathon (Daily Bruin).
Billboards along the Sunset Strip have long been used to promote music, movies, fashion and more. But the city of West Hollywood has been rethinking the aesthetics of the displays, as well as the economics.
On Wednesday, city officials and the local Chamber of Commerce will unveil one result of that process near the strip's intersection of La Cienega: a billboard pole with a new twist. Designed by LA-based Lorcan O'Herlihy Architects, the cobalt blue, V-shaped structure near the intersection of La Cienega looks like a piece of modern sculpture.
“It’s really beautiful and it’s exceptional, and I think it will reset the standard for new billboards and revised billboards on the sunset strip,” West Hollywood City Councilman John D’Amico told KPCC.
A photographer for Wehoville got to watch the billboard pole under construction.
Disney's $500 million deal for Maker Studios is being challenged.
Happy Friday. Welcome to KPCC's business blog, The Breakdown. Every weekday morning, we compile a list of interesting business stories in the region.
- Waxman takes issue with Tribune Co.'s spin-off plans. Rep. Henry Waxman said Friday he wants L.A. Times corporate parent Tribune Co. to change the structure of its plans to spin-off its newspapers into a separate company. (The Breakdown's Wendy Lee/KPCC)
- Audit takes issue with LAX finances. The audit from the Inspector General of the U.S. Department of Transportation claims that in recent years, there was a $49 million discrepancy between what Los Angeles World Airports was reporting to the FAA in recent years and its internal reports. (Daily Breeze)
- Not so fast, Disney! The co-founder and ex-CEO of Maker Studios and other former executives are suing to block a shareholder vote on Disney's acquisition of Maker (Variety). This KPCC report on Disney's move to buy the Culver City based digital video firm with more than 55,000 YouTube channels includes a video profile of Maker Studios.
- Disney's tech accelerator deadline is next week. Two months ago, Disney announced an accelerator program to develop the next big ideas in entertainment and technology. As Deadline mentions in its coverage of a well-attended meeting this week about the program, the deadline for the entrepreneurs wanting to be in the first class is next Wednesday.
- Gas prices keep climbing. City News Service reports the average price of a gallon of self-serve regular gasoline in Los Angeles County recorded its largest daily increase since June 22 Friday, rising 3 cents to $4.18. That's its highest amount since March 18, 2013. The average price has increased eight consecutive days, according to figures from the AAA and Oil Price Information Service.
- Port of Long Beach officials prefer to go it alone. Not many folks in Long Beach seem to like the idea of merging with the Port of Los Angeles. "Simply put, this is a bad idea," Doug Drummond, president of the Long Beach Board of Harbor Commissioners told the LA Times. The Vice President of the Board went even further with KPCC.
- Amazon employees could get paid to quit. The Los Angeles Times reports Amazon.com is offering employees up to $5,000 if they quit. It's not the first company to try the practice, which some companies say can boost productivity and morale. Last October, KPCC got a look inside Amazon's million-square-foot warehouse in San Bernardino.
The Los Angeles Times building in downtown L.A.
Rep. Henry Waxman said Friday he wants L.A. Times corporate parent Tribune Co. to change the structure of its plans to spin-off its newspapers into a separate company.
Under the current plans, the newspapers would need to pay a cash dividend through debt financing. The Chicago Tribune has reported this dividend could be worth $325 million and Waxman (D-CA) would like to see that number reduced.
"It is unfair to make struggling newspapers take on hundreds of millions of dollars in debt to pay a cash dividend to the profitable TV broadcasters remaining in the parent company," Waxman wrote in a letter to Tribune's CEO Peter Liguori.
Waxman wrote he has consulted with other media and business experts who also express concerns about the L.A. Times' corporate parent Tribune Co.'s plans to spin-off its newspapers into its own separate company.