AT&T has asked Sony Corporation to purchase its streaming anime service Crunchyroll for $1.5 billion, according to a report.
The news was first reported Thursday by Silicon Valley trade publication The Information, who sourced the scoop to three unidentified individuals who said to be familiar with negotiations between the two companies.
Launched in 2006, Crunchyroll features dozens of animation shows and television dramas from Japan. The service was acquired by AT&T’s WarnerMedia subsidiary when the telecom bought Crunchyroll’s parent company Otter Media in 2018 for around $1 billion.
Crunchyroll is one of several WarnerMedia brands that has contributed content to AT&T’s blockbuster streaming service HBO Max since it launched in April. It was not immediately clear what would happen to Crunchyroll’s content on HBO Max if AT&T offloads the service onto another company.
On Thursday, The Information’s Jessica Toonkel and Tom Dotan reported AT&T offered Sony the opportunity to purchase Crunchyroll for $1.5 billion, a $500 million premium on what AT&T reportedly spent to acquire the service two years ago.
The reporters said the deal was far from certain in part because Sony has resisted the price point.
Japanese animation has become a hot commodity for domestic streaming services, and companies like Netflix and Disney’s Hulu have spent a considerable amount of cash to secure licensing rights for the niche shows.
But analysts told The Information AT&T’s purported asking price for Crunchyroll is well above industry valuations for comparable services on the market.
It would also put it above AT&T’s own valuation, The Information said. When it acquired Crunchyroll as part of the company’s purchase of Otter Media, AT&T valued the streaming service an associated website at just $600 million.
Though Crunchyroll remains a popular WarnerMedia asset, AT&T appears willing to part with valuable services in order to draw down on some of its $150 billion in debt that the telecom accumuluated through its mega purchases of satellite television service DirecTV and media assets formerly owned by Time Warner.
In July, AT&T said Crunchyroll had 3 million paying subscribers.