Will Ferrell’s comedy video site, Funny or Die, has hired Moelis Co. to investigate the possibility of a sale. According to Bloomberg, Funny or Die CEO Dick Glover, told employees that executives are not trying to sell the company but after receiving several unsolicited bids “we thought it wise to engage some experts to help us evaluate the situation.” The reported price tag is between $100 million and $300 million.
Big media companies are falling all over themselves to snatch up what are known as multi-channel networks (or MCNs), web sites that aggregate videos from lots of different creators. Maker, the biggest MCN, which hosts YouTube celebrities like PewDiePie and Epic Rap Battles, sold to Disney earlier this year for $500 million. That price could actually climb to $950 million if Maker hits certain targets. Peter Chernin and ATT ATT then paid a reported $200 million for Fullscreen which boasts the Fine Brothers and Shane Dawson. In September I wrote about five more MCNs that could soon be on the table. Since then investors have bought majority shares in two of them, Stylehaul and Whistle Sports.
“This is part of a continuing trend where we’re seeing a land grab for these verticals,” says Peter Csathy CEO of Manett Digital Media.
Csathy says Funny or Die is a particularly valuable property because no one really owns funny yet in this space. Companies like Maker and FullScreen have their share of comedy channels but they also have plenty of video game commentary, how-to videos and lifestyle channels.
Funny or Die is all comedy, all the time. Founded in 2007 by Ferrell, his production partner Adam McKay and Chris Henchy, the site burst onto the scene with the viral video The Landlord which featured McKay’s two-year-old daughter as a mean-as-hell landlord harassing Ferrell for the rent. The hysterical video has since been viewed 85 million times.
The Landlord set the stage for other videos featuring celebrities making funny stuff on their downtime. Some of the site’s other big hits include Don Cheadle’s demented superhero Captain Planet and a True Detective spoof calledTiny Detectives starring Ellen Page and Kate Mara.
But by far the biggest hit on the site isBetween Two Ferns, Zach Galifianakis’ faux local cable talk show. Each episode features Galifianakis’ rude host awkwardly interviewing a celebrity. Many of the episodes have become viral classics (like this recent one with Brad Pitt) and Galifianakis scored a serious coup last year when President Obama decided to use Between Two Ferns to pitch his health care plan to young people.
While there’s no word on who exactly is looking to buy the company, Csathy says it would be a great fit for any big media company. With more entertainment being created and watched online, the giant, public companies that dominate the entertainment space are racing to get a solid foothold online. The easiest way to do that is to just buy an existing company. That’s why Disney spent so much on Maker. The Mouse House can use the company to promote its products or create online versions of its vast library of intellectual property and it can tap the talent creating on Maker for new shows and movies.
Time Warner Time Warner already has an investment in Funny or Die and with the rejection of News Corp News Corp.’s $80 billion offer to buy the company, the pressure is on for CEO Jeff Bewkes to find ways to boost the company’s stock price. Buying Funny or Die could help the company grow in a whole new direction.
Funny or Die has already started successfully branching out beyond the Internet. The series Drunk History, where drunk people tell true stories from history while professional actors reenact their confused versions, started out as a successful web series on Funny or Die and is now a show on Comedy Central. Then there’s the Oddball festival, a live comedy event that tours the nation in the summer and features stars like Sarah Silverman and Louis C.K. With the financial backing of a big media company, the brains behind Funny or Die could take the brand to new levels.