WarnerMedia is looking to offload Crunchyroll, its anime subscription-streaming service — with an asking price of at least $1 billion — as parent company AT&T seeks to pay down debt, sources tell Variety. One of the potential buyers is Sony Pictures Entertainment, which operates the competing Funimation service.
WarnerMedia’s move to sell Crunchyroll was previously reported by The Information, which said the media company wanted $1.5 billion for the streamer. But a source familiar with WarnerMedia’s plans said that was much higher than the company is expecting to get for Crunchyroll, which is being pitched to additional buyers besides Sony.
Reps for WarnerMedia, Crunchyroll and Sony Pictures Entertainment declined to comment.
Crunchyroll two weeks ago announced that it surpassed 3 million paying subscribers worldwide, and has more than 70 million registered users. In the U.S., the no-ads subscription version of the service is $7.99 per month and includes simulcasts of Japanese anime programs as soon as one hour after they air in the country.
Currently, Crunchyroll features more than 1,000 titles and 30,000 episodes, which it claims represents the world’s largest anime library.
Crunchyroll is part of WarnerMedia’s Otter Media division, which also includes Rooster Teeth, Fullscreen, VRV and interests in Reese Witherspoon’s Hello Sunshine and studio Gunpowder & Sky. (The telco bought out the Chernin Group’s majority stake in Otter in 2018.)
Over the last two years, AT&T has been strategically selling off assets to cut its debt load. Last year, for example, AT&T sold its 10% stake in Hulu for $1.43 billion. As of the end of June, the company reported $153.4 billion in long-term debt, much of that amassed from the Time Warner deal.
Founded in 2006, Crunchyroll is currently headed by general manager Joanne Waage. She took over for co-founder and former GM Kun Gao in late 2018.
Earlier this year, Crunchyroll announced its inaugural slate of originals, with 12 total series announced to date. The first two originals “Tower of God,” a Crunchyroll and Webtoon Production, and “The God of High School,” both set new viewership records on platform, according to Otter Media.
In late 2019, Crunchyroll closed the majority acquisition of Viz Media Europe Group, expanding its suite of consumer brands to include streaming services Anime Digital Network (in partnership with Citel, a subsidiary of Média-Participations) and Anime on Demand, DVD and manga publisher KAZÉ, and live-action content distributor Eye See Movies. Crunchyroll also hosts events (including owned events Crunchyroll Expo, Anime Awards, Crunchyroll Movie Nights, and KAZÉ Anime Nights), offers a line of consumer products, operates Crunchyroll Games, and sells manga titles.
Funimation and Crunchyroll previously had a deal to cross-license content (under which Crunchyroll had offered subtitled versions and Funimation provided dubbed versions of the same shows). But Sony, which bought Funimation in 2017, ended that deal in 2018. Funimation is now an independently operated joint venture between Sony Pictures Entertainment and Japan’s Aniplex, a subsidiary of Sony Music Entertainment (Japan) Inc.