From left, CarCast co-hosts Matt D’Andria and Adam Carolla speaking with Steve Yaeger of Nissan about racing cars for the automotive podcast on Aug. 25, 2018, in Monterey, Calif.

Photo: Eric Kayne/Associated Press

Digital-media company LiveXLive Media Inc. will acquire PodcastOne parent Courtside Group Inc., the companies said, in a bet that bigger is better amid the coronavirus pandemic and that ad revenue for podcasting will continue to soar unabated.

The all-stock deal, which will make PodcastOne founder Norman Pattiz a major shareholder in LiveXLive, values the podcast network at $18.1 million as of Thursday’s closing, with the transaction expected to close in June.

LiveXLive, which streams radio, on-demand video and live performances, will now offer podcasts both to its free, ad-supported users and to subscribers. Courtside, founded in 2010, brings via PodcastOne a roster of talent, including Adam Carolla, Shaquille O’Neal, Steve Austin, Kaitlyn Bristowe and rapper Tip “T.I.” Harris. Mr. Pattiz, a broadcasting veteran who also founded radio network Westwood One, will join as chairman of the new podcasting unit.

PodcastOne, with a library of more than 300 podcasts, produces over 350 episodes each week and generates over 2.1 billion downloads annually.

The deal, at current stock pricing, is more conservative than many in the fast-growing podcasting space over the past two years. Companies and talent have been fetching a premium when they join media giants Spotify Technology SA, iHeartMedia Inc., Entercom Communications Corp. and E.W. Scripps Co. ’s Stitcher. PodcastOne recorded $27.5 million in revenue in 2019.

Mr. Pattiz and LiveXLive Chief Executive Rob Ellin acknowledged the difficult environment—particularly for advertising—brought on by the pandemic and said they were focused on building a bigger and more diversified company.

“This is about, ‘Where are we going to be in three to four years,’ not where we are today,” said Mr. Ellin. “Nobody expects this year to be easy. We’re in this for the long run.”

The companies, both based in Los Angeles, envision cross-pollinating advertisers, subscribers and talent across their offerings, which span from streaming concerts and internet radio to podcasts.

“We can bring out our talent, our artists—many of whom are going to need new revenue streams—into the podcasting world,” said Mr. Ellin, referring to musicians who are struggling financially because of canceled tours.

U.S. ad revenue from podcasts stands out as a bright spot amid an advertising slump. It rose an estimated 42% to $678.7 million last year, according to the Interactive Advertising Bureau, and was projected to rise to $863.4 million this year and exceed $1 billion by 2021.

Mr. Pattiz said ad revenue for sports podcasts is lagging amid the pandemic but has grown in other categories, including shows geared toward women.

Mr. Ellin said LiveXLive’s business, which is currently about 90% subscription-based and 10% advertising, will be closer to 60% subscription and 40% advertising when the deal is done. The company last reported 820,000 subscribers of tiers running from $3.99 to $9.99. PodcastOne offers program-specific subscriptions for $4.99 a month and has a premium platform-wide subscription for $8.99 a month, though generates most of its revenue from advertising.

LiveXLive also plans to move into pay-per-view and tipping models, particularly in its live-streaming business, which has grown during the pandemic with many artists performing virtual concerts. To date in 2020, LiveXLive has streamed performances by over 775 artists, compared with 300 in all of 2019.

Write to Anne Steele at Anne.Steele@wsj.com

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