AT&T Explores Sale of Rooster Teeth Online Media Unit
AT&T Explores Sale of Rooster Teeth Online Media Unit
(Bloomberg) -- AT&T Inc. is seeking buyers for Rooster Teeth Productions LLC, a piece of its WarnerMedia division, as part of an ongoing winnowing of noncore assets by the phone giant, according to people familiar with the matter.
The pandemic has complicated efforts to sell the business, said the people, who asked not to be identified because the matter is private. Rooster Teeth canceled its annual RTX convention last year in Austin, Texas. And in June, co-founder Burnie Burns, who served as chief executive officer, left the company. It wasn’t clear how much money AT&T is seeking for the business.
The phone company has been paring assets to focus on a key areas, including its new 5G wireless business, which requires billions of dollars of investment. AT&T also is expanding its fiber-optic footprint and boosting movie and TV production to attract subscribers to HBO Max, the new streaming service run by WarnerMedia.
As AT&T discovered with its DirecTV satellite-television division, declining businesses aren’t an easy sell. After seeking a buyer for that division for months, the company decided to spin it off into a joint venture with the private equity firm TPG.
Even before the pandemic, Rooster Teeth was struggling. Revenue slumped to about $50 million in 2019 from about $70 million a year earlier, one of the people said. It was founded 18 years ago as a web-based video producer. The business expanded into gaming, podcasts, T-shirts and fan conferences. Today, it is best known for the animation series “RWBY.”
Other small divisions have also been unloaded. AT&T agreed to sell the anime-creator Crunchyroll to Sony for $1.2 billion last year, and has also parted with its Puerto Rico phone operations, a stake in Hulu, a Central Europe media group and nearly all of its offices at New York’s Hudson Yards.
Rooster Teeth was part of Otter Media, an early foray into media by Dallas-based AT&T that preceded its $85 billion takeover of Time Warner Inc. in 2018.
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