AT&T To Add Otter Media To New WarnerMedia Portfolio
AT&T is continuing its summer buying spree even as its deal with Time Warner faces renewed challenges from the Justice Department. The carrier announced on Tuesday that it has fully acquired online content provider Otter Media, a company in which AT&T co-owned with The Chernin Group.
Full buyout of Otter Media will give AT&T control over valuable advertising and content assets as carriers scramble to better compete in the online video arena. The company will become part of AT&T's new WarnerMedia business unit, according to the Dallas-based carrier.
Otter Media is currently valued around $1 billion. The deal comes less than two months after AT&T closed its $85.4 billion megamerger with Time Warner .
[Related: DOJ: AT&T's Time Warner Deal Ignores 'Economics And Common Sense ']
Otter Media assets include wholly-owned subsidiaries Ellation, an online subscription video service provider, as well as digital media company FullScreen and Crunchyroll, a subscription anime service. Otter Media also has a stake in global content studio Gunpowder & Sky, as well as Hello Sunshine, a media company founded by actress Reese Witherspoon.
The company will continue to be run by Otter's current CEO Tony Goncalves, who will report to John Stankey, AT&T's WarnerMedia CEO.
"Working with [Goncalves], we look to harness Otter’s expertise in feeding the passion of online audiences to augment our portfolio of digital assets and help us further engage, connect and entertain consumers around the globe," Stankey said in a statement.
Reports surfaced in June suggesting that AT&T was getting ready to buy out The Chernin Group. At the time, the deal had been reportedly in the works for a several years, but was considered on hold until AT&T’s Time Warner acquisition closed, according to sources familiar with the matter.
Otter Media was founded in 2014 by AT&T and The Chernin Group as a joint-effort to invest in and develop platforms and properties to take advantage of the growth of direct-to-consumer subscription and advertising models, as well as the rise of new digital media brands, according to the companies.