Dec 10, 2020

It's Official: Sony's Funimation to Acquire Crunchyroll from AT&T for $1.175 Billion

After months of rumors, news has been announced: Sony's Funimation Global Group is to acquire AT&T's Crunchyroll.

The two companies agreed on a sale price of $1.175 billion, higher than the $975 million announced in November but lower than the $1.5 billion that the debt-ridden AT&T was reportedly originally seeking. This price will be paid in cash, after working capital and other adjustments. The sale has not yet received regulatory approval.

The sale represents a major consolidation of global anime streaming and distribution; Crunchyroll, with 3 million SVOD subscribers and 90 million registered users in 200 countries, produces original works, publishes news, in addition to streaming distribution, forums, and hosting events; Funimation streams its catalog of more than 700 series in 49 countries and distributes and sells six of the top 20 animated films in the U.S.

. It remains to be seen how Sony will integrate the two platforms, i.e., which services will be maintained under what name, what the fees will be, etc. There is also a question mark over the curated collection of Crunchyroll titles currently available on AT&T's HBO Max.

Tony Vincichella, Chairman and CEO of Sony Pictures Entertainment, said in a statement:

"Funimation, and our great partners at Aniplex and Sony Music Entertainment Japan Together with Crunchyroll, we are committed to creating the best possible experience for our fans and greater opportunities for creators, producers and publishers in Japan and beyond. We will create even greater opportunities for creators, producers, and publishers in Japan and other countries.

However, it is almost certain that this agreement will lead to fewer buyers for Japanese anime producers' productions, which could lead to a decrease in production budgets. Fans are also not so sure. Sony owns Aniplex and Anime Lab, and Funimation has a distribution deal with Viz. Crunchyroll's parent company owns VRV, and VRV has a deal with HiDive. So basically it is a small number of Netflix "originals," Amazon Japan's deal, and Sony.

- Pat-Mas in DecemBaer (@patbaer) December 10, 2020

Can't wait for Crunchyroll and Funimation merger to be completed, 3 million paying members, avid viewers, AT&T has $160 billion in debt, and could have been sustained if not for a surge in investment in other HBO Max content that should have been a priority.

Sony now controls the U.S. animation market.

- julia alexander (@loudmouthjulia) December 10, 2020

Polygon asked me to write an analysis of Sony's acquisition of Crunchyroll. There are both good and bad possibilities, but either way it will help strengthen Sony's vertical integration in the animation industry. https://t.co/NsT2yZUf7o

- D.M. Moore (@Kiey) December 10, 2020

Over the past five years, Sony and its animation subsidiary Aniplex have acquired Wakanim in France, Madman Animation in Australia, and Funimation itself (95% for $143 million stake), and has spent the past five years on an animation takeover spree. Last year, the three companies were combined under the Funimation name.

The animation market in the U.S. is booming with significant investment from streaming platforms. In recent years, general streaming distributors such as Netflix in particular have entered the market. The Japan Animation Association, the trade association representing Japanese anime producers, recently calculated that the overall anime industry will grow to a record 2.5112 trillion yen (about US$24.08 billion) in 2019.