The company will pay $500 upfront for Maker Studios, plus up to an additional $450 million in bonuses if Maker Studios can achieve performance-based milestones.
"Short-form online video is growing at an astonishing pace and with Maker Studios, Disney will now be at the center of this dynamic industry," said Disney CEO Bob Iger in a statement.
Maker Studios currently manages around 55,000 channels, which collectively receive 5.5 billion video views per month. The company currently distributes to a total 380 million YouTube channels subscribers.
Disney said the deal, expected to close in its third quarter ending June, will have a mildly negative impact on its earnings through to fiscal 2017.
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TheStreet Ratings team rates DISNEY (WALT) CO as a Buy with a ratings score of A+. The team has this to say about their recommendation:
"We rate DISNEY (WALT) CO (DIS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."