WarnerMedia Shopping Crunchyroll Sale

Crunchyroll Expo promo - Publicity - H 2019

Sony, which owns Funimation, is among the potential acquirers.

WarnerMedia is looking to offload anime-focused streaming service Crunchyroll, and Sony is among the interested acquirers, according to a source with knowledge of the talks. 

The 14-year-old service passed 3 million subscribers in late July, up from 2 million at the end of 2018. That's about the same amount of retail subscribers that WarnerMedia's 2-month-old HBO Max has attracted. 

But despite Crunchyroll's relative success for a niche streamer, WarnerMedia parent company AT&T has been looking to reduce its debt load. As such, the source says that new WarnerMedia chief Jason Kilar wants to sell any assets that aren't core to the entertainment company's business.

WarnerMedia's streaming bet has been placed on HBO Max, which launched at the end of May to offer a broad catalog of programming from across the company's networks and studios. Crunchyroll has a brand tile on the app, where it curates a selection of anime programming but has also remained a stand-alone subscription service. In a recent interview with Deadline, general manager Joanne Waage said "the goals is to fuel both" services.

A deal for Crunchyroll would add to Sony's existing Funimation anime business, but the source says that Sony's offer is less than what WarnerMedia was hoping to fetch for the company. The Information, which first reported on the sales talks, said WarnerMedia's asking price for Crunchyroll is $1.5 billion.

Representatives for Otter Media, the WarnerMedia division that houses Crunchyroll, and Sony declined to comment. 

Kilar, who previously ran Hulu and short-lived video business Vessel, is quickly making WarnerMedia his own after joining the company in May. In early June, reports emerged that the company was looking to sell gaming unit Warner Bros. Interactive Entertainment. Then, on Friday, he announced a sweeping reorganization that included the ouster of entertainment executives Bob Greenblatt and Kevin Reilly and created a new Ann Sarnoff-led division that encompasses both its studios and networks businesses. (In his memo to staff, Kilar said the gaming unit would be part of the Studios and Networks group but did not offer commentary around a potential sale.) 

In an interview with THR, Kilar said the changes to WarnerMedia reflect his plan to turn it into a consumer-facing operation with a focus on its streaming and global businesses. "It became pretty clear that we needed to have one content organization to make it easier for us to make decisions to greenlight the best possible stories that we can then take increasingly direct to consumers," he said.