Discovery Communications on Thursday said it has agreed to acquire a minority stake in millennials-focused Group Nine Media, a new holding company that will bring together Thrillist Media, in which Axel Springer owns a minority stake, Discovery's digital network Seeker and others, via a $100 million investment.
The group also includes NowThis Media, The Dodo and Seeker's production studio SourceFed Studios.
Discovery and Group Nine also entered into a strategic partnership.
The Group Nine Media deal will expand Discovery's push into the digital network space targeting millennials, which began with the 2012 acquisition of digital network Revision3 and the subsequent acquisition in 2013 of Philip DeFranco's portfolio of online video channels and ventures, DeFranco Creative. It renamed those Seeker and SourceFed Studios.
Discovery will have an option to buy a controlling stake in Group Nine Media. Germany's Axel Springer will be the second-largest shareholder in the company.
"The merging of these millennial-focused brands will immediately create in Group Nine Media one of the largest digital-first media companies," the companies said. They cited more than 3.5 billion global monthly video views, more than 12 billion monthly social impressions, 40 million-plus Facebook followers and 30 million-plus YouTube subscribers and said the firm is the No. 1 video news publisher on Facebook.
Ben Lerer, CEO of Thrillist, will serve as CEO of Group Nine.
"Today marks the start of a strong new company with tremendous brands, reach and scale," said David Zaslav, president and CEO, Discovery Communications. "The merger of these assets will bring together best-in-class management, led by Ben and his team, expertise in data analytics technology and global reach to create one of the world's largest digital-first content companies attracting young passionate enthusiasts that advertisers want to reach."
Said Lerer: "This is truly a 'win-win' scenario, allowing our brands the opportunity to remain independent and build our own future, while at the same time, having the support of one of the best media and entertainment companies in the world. Each of our brands has found great success independently, but with consolidation of digital content companies around the corner, there is extraordinary value in all existing under one multi-brand roof. We will be stronger brands working together - we will have more influence; we will have better data and insights; we will be better partners to our advertisers; and most importantly, we will be substantial enough to make a real difference and stay ahead of the market."
The partnership between Discovery and Group Nine will include a commercial agreement that will enable advertisers to reach their desired audience via opportunities across multiple platforms including linear, digital, social and live events.