Hello Sunshine Profit Drops 90% Due to Strikes
Hollywood strike disruptions mean Reese Witherspoon’s Hello Sunshine production company’s profits will come 90% shy of expectations, helping to drag down parent Candle Media’s results for the year, Bloomberg reported.
Despite some hits, like the Emmy-nominated “Daisy Jones & the Six,”which airs on Amazon Prime, the shutdowns in productions have hurt the company, which Candle bought Hello Sunshine in August 2021 for an eye-popping $900 million.
Candle followed up in November 2021 by dropping $3 billion for Moonbug Entertainment, producer of the popular Netflix kid’s program “CoComelon.”
Moonbug is expected to see a 30% earnings slide and together, the two holdings are expected to pull down Blackstone-backed Candle Media results by about 50% short of Wall Street expectations.
As a result, Candle, the entertainment company led by former Disney execs Kevin Mayer and Tom Staggs, is asking lenders to restructure some of its $1 billion debt. The hefty load is the result of $4 billion in acquisitions, including Hello Sunshine and Moonbug, that have so far failed to produce, Bloomberg reported.
The company is aiming to cut its cash interest payments, Bloomberg reported, citing people familiar with the matter. Candle is waiting for lenders to respond to the proposal, the report said.
A spokesperson for Blackstone told the outlet that the investment manager routinely holds discussions with lenders on loan amendments, and coming out of the double-whammy of the Hollywood strikes, such an effort would be expected.
Mayer and Staffs have also previously blamed a broad spending pullback in the entertainment industry and the weak advertising market, particularly on YouTube, for Candle’s struggles, though YouTube reported a solid 12% growth in ad revenue for the third quarter.
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