Whatever happened to Disney and Maker Studios $500M big deal?

By MoneyTimes

Aug 20, 2015 03:34 AM EDT

It's more than a year ago when Disney acquired popular YouTube network for $500 million yet it seems the deal was not really as big as it appeared to be. The deal includes an outstanding offer of another $450 million to Maker if the latter meets certain milestones.

Skeptics thought that the deal between Maker and Disney is too expensive. Maker is also considered lacking their own audience as it only relies on YouTube for artist distribution.

But Bob Iger, Disney CEO, insisted that Maker Studios have a unique talent of reaching digital video viewers that his company would not be able to do. On top of that, Disney thinks that Maker can also help promote other Disney properties to the youth.

An article in Re/code says the partnership is not going as expected because of various reasons including clashes between top executives and Disney allegedly not completely taking Maker into its empire. In fact, CEO of Maker Studios, Ynon Kreiz will leave the company by the end of 2015 just as the earn-out period finishes.

Also, rumors say that since Maker did not meet specific growth targets it will be receiving less than half of the agreed bonus when Maker seemed very certain that they will be able to meet the milestones.

Although Disney and Maker have been successful in promoting the upcoming Star Wars film and other Marvel movies, a clash between the two is observed because Maker's executives think that they were not given complete access to Disney's world as they had initially expected.

Another rumored reason behind the unsuccessful partnership of Disney and Maker is the former's corporate structure. Maker initially reports to Disney's CFO but when Jay Rasulo quit, they had to now report to James Pitaro, the interactive unit head and who is said to be hesitant of the partnership. Consequently, Maker refuses to report to Pitaro.

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