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President Kenichiro Yoshida speaks at the Sony headquarters in Tokyo in 2018, when the company first acquired a stake in Peanuts.Eugene Hoshiko/The Associated Press
The Toronto entertainment company WildBrain Ltd. WILD-T is selling its 41-per-cent stake in the Peanuts franchise to Sony SONY-N for $630-million, giving the Japanese conglomerate control of Charlie Brown and his friends while cutting the Canadian firm’s debt.
Snoopy, Linus, Lucy and their crew became incidentally Canadian in 2017 when WildBrain, under previous name DHX Media Ltd., bought 80 per cent of Peanuts Worldwide LLC as part of the US$345-million purchase of Iconix Brand Group Inc.’s entertainment unit. The next year, Sony snapped up 39 per cent of Peanuts from the Canadian company.
The latest transaction, which is in cash, brings the combined stake of Sony Music Entertainment (Japan) Inc. and Sony Pictures Entertainment Inc. to 80 per cent – with the family of Peanuts creator Charles Schulz holding on to 20 per cent of the brand.
WildBrain says that parting with some of the world’s most recognizable characters is financially savvy, helping it fully repay a line of credit while leaving more than $40-million in surplus. This, it says, will be reinvested in franchises such as Strawberry Shortcake and Teletubbies, and in offering more premium digital content.
Children’s television and animation has for decades been one of Canada’s major entertainment exports, but the sector has struggled in the past few years as costs surged and streamers’ appetites changed. Animation studios have been plagued by layoffs, storied producer Nelvana halted production and WildBrain itself said it would shutter four channels, including the long-running Family Channel, after Rogers and Bell said they would stop distribution.
WildBrain executives were not available for interviews on Friday. In an investor webcast, chief executive Josh Scherba said the transaction would wipe the debt from WildBrain’s balance sheet, saving the company $50-million in annual interest payments and putting it “in a much stronger position.”
“We now get to play offence,” he added, casting the company’s strategy as “designed for where kids and family entertainment is going – not where it’s been.”
The company said proceeds from 2018 and the sale announced this week, in combination with profit tied to its stake in the franchise over the past nearly eight years, would lead to a total income for WildBrain from Peanuts topping $1-billion.
WildBrain said it would remain a partner in the Peanuts brand for years to come by holding licences for consumer products in many jurisdictions worldwide. It will still manage the Peanuts content it produced, and it will keep overseeing the official Snoopy YouTube channel. WildBrain will also continue to own the Vancouver animation studio that works on new Peanuts broadcast content for Apple TV, which includes a coming feature film. (It will remain the official production studio for Apple TV Peanuts content until at least 2030.)
“We are deeply committed to carrying forward the legacy of Charles Schulz and the Schulz family,” said Shunsuke Muramatsu, president and group chief executive officer of Sony Music Entertainment (Japan), in a press release. “Backed by WildBrain’s continued partnership, we will continue to embrace new opportunities to ensure that Peanuts remains a relevant and beloved presence across generations.”
In WildBrain’s last fiscal quarter, it reported a $32.6-million loss attributable to shareholders, more than triple its loss from the same quarter a year earlier.
In its webcast, the company also said it would add artificial-intelligence capabilities to its animation pipelines – a move it said would reduce costs and boost revenue. Animation is one of the major creative fields in which workers have expressed fear over job losses and diminished creativity because of AI.
