Technology website The Information reported on Wednesday that the U.S. Justice Department has extended its antitrust review of Sony's proposed US$1.175 billion acquisition of Crunchyroll from AT&T. The Information notes that the review, which seeks to determine if the deal would give Sony dominance over anime streaming, could delay the sale by several months and could also potentially kill it. Justice
Justice Department attorneys are reviewing the deal to see if it would give Japanese animation studios fewer options to distribute shows in the U.S. The Information adds that the review could take six months or longer, and that if the department does not approve the merger, it could sue to block it.
Crunchyroll announced in December that Sony's Funimation Global Group will acquire Crunchyroll. Sony reported that the purchase price will be US$1.175 billion, to be paid in cash at closing. The deal is still awaiting regulatory approvals and other conditions.
Nikkei Asia reported in October that Sony was in final negotiations for the Crunchyroll acquisition. At that time, the newspaper reported that Sony "could end up spending more than 100 billion yen ($957 million)." The Information reported in August that AT&T offered Crunchyroll to Sony for US$1.5 billion. The Information stated then that Sony reportedly "balked at" the price, which effectively values the streaming service at US$500 per subscriber. Entertainment news source Variety then reported a few days later that AT&T had set an asking price of at least US$1 billion for its sale of Crunchyroll. Variety stated that AT&T was shopping the company to multiple potential buyers aside from Sony Pictures Entertainment.
Crunchyroll launched in 2006 as a streaming service offering anime titles without authorization. The website secured US$4.05 million in its first-round funding from Venrock and began licensing titles for streaming in 2008.
The Chernin Group acquired a majority stake in Crunchyroll in December 2013. The Chernin Group and AT&T formed the joint venture Otter Media in 2014, and Otter Media invested another US$22 million in Crunchyroll's parent company Ellation in November 2015. AT&T then announced in August 2018 that it acquired all of Otter Media.
The service had reached more than one million subscribers in February 2017, more than two million subscribers in October 2018, more than three million subscribers in July 2020, and more than four million subscribers in February.
Crunchyroll and Viz Media Europe closed the deal for Crunchyroll to become the majority owner of Viz Media Europe Group in December 2019. The companies announced the agreement in September 2019. Viz Media Europe SAS (Société par Actions Simplifiées or simplified joint-stock company) announced in April that it changed its name to Crunchyroll SAS. Since the December 2019 deal of Crunchyroll's majority ownership of Viz Media Europe, Crunchyroll has also owned French anime distributor KAZÉ (the company was integrated with Viz Media Europe in 2009).
Sony History with Anime Streaming Services
Sony Pictures Television and Aniplex consolidated three Sony-owned anime acquisition and distribution companies — Funimation based in the United States, Wakanim based in France, and Madman Anime Group based in Australia — into one joint venture in September 2019. Sony Pictures Television Networks acquired a majority stake in Funimation for US$143 million in 2017. Funimation ended its content-sharing partnership with Crunchyroll in November 2018, and then signed a first-look streaming deal with Hulu in December 2018.
Thanks to rastergrafx and Poi Lee for the news tips.
Source: The Information (Josh Sisco, Jessica Toonkel)