Sony Pictures Sells Stake in Crackle TV Unit to Chicken Soup for the Soul
(Bloomberg) -- Sony Pictures Television is selling its ad-supported video content network, Sony Crackle, to Chicken Soup for the Soul Entertainment Inc. in a joint-venture agreement.
Chicken Soup, an advertising-video-on-demand (AVOD) network operator, will own a majority stake in the new streaming video service to be branded Crackle Plus. Chief Executive Officer Bill Rouhana anticipates the venture "will more than double the revenue" for Chicken Soup "and probably do the same for Ebitda."
Financial terms of the deal were not disclosed, but Sony Pictures Television will receive 4 million 5-year warrants to purchase Class A common stock of Chicken Soup at various prices.
Shares of Chicken Soup saw their biggest climb in over a year Thursday before the announcement, and rose 16 percent after-hours when the deal was disclosed. Since a peak in May last year, the stock has fallen 18 percent. Rouhana sees the current deal with Sony Pictures TV as a value add, potentially positioning the business as a strategic asset in the future, citing Viacom’s recent acquisition of online streaming service Pluto TV.
"Obviously having one of the largest AVOD businesses is an important strategic asset in the media business, so we’re certainly going to be in a place where we can be looked at," Rouhana added. "But today we’re buying, not selling."
With the joint venture, Chicken Soup is gaining assets in the U.S. that include the Crackle brand and its ad-representative business. Crackle Plus is projected to amass 10 million active users, 90 content partnerships and more than 38,000 hours of programming.
In January, Chicken Soup bought Ashton Kutcher’s digital media company APlus.com for $15 million in cash and stock.
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