Multichannel networks have been getting a bad rap this past week as a result of a Recode report that Maker Studios' earn-out from its M&A megadeal with Disney might be less than half the maximum $450 million, which would still give Maker execs and investors a nice little $700 million-plus win. Not bad.
The nonbelievers, however, are using this news as the central exhibit in their case slamming the value of MCNs—more accurately known as MPNs these days—and what they say are inappropriately lofty valuations to date for relevant acquisitions. That includes Otter Media's acquisition of Fullscreen for up to $300 million, RTL Group's acquisition of StyleHaul, which valued the company at up to $200 million, and ProSieben.Sat1's recent acquisition of Collective Digital Studio, which valued the overall package at about $240 million.
But as someone immersed in the overall video ecosystem (yet hasn't been involved in any of these deals), I strongly disagree. They are completely missing the fundamental point and justification for those deals. I remain bullish. Very.
This article was originally published as a guest column in Variety. To read the rest of Csathy's analysis, click here.