Earnings at Candle Media, the Blackstone-backed company founded by former Disney executives Kevin Mayer and Tom Staggs, could come in about 50% below what its acquired companies had forecasted for 2023, according to Bloomberg.
The outlet, which cited sources familiar with the matter, said the shortfall stems from Reese Witherspoon’s Hello Sunshine and “Cocomelon” owner Moonbug Entertainment. Mayer and Staggs reportedly blamed a decline in advertising at YouTube, the Hollywood strikes and a spending pullback in the entertainment industry.
According to Bloomberg, Candle is expected to post a profit of around $140 million to $170 million, with Hello Sunshine expected to account for just 10% of projected earnings and Moonbug expected to account for about 30%. That’s below an earlier estimate of $330 million. Moonbug is reportedly expected to generate about $150 million in profit this year, while Hello Sunshine is on track for less than $10 million.
A spokesperson for Blackstone told TheWrap that the figures cited by Bloomberg are not the projections of the private equity firm or Candle – which were “substantially more conservative” when it underwrote its initial investment of more than $1 billion.
“Candle is a highly profitable, high-quality business with world-class talent and creative output that has had significant organic growth since our investments,” the Blackstone spokesperson added. “As with virtually everyone else in this industry there has been an impact from once-in-a-generation strikes, but we are confident about how well positioned Candle is for further earnings growth going forward.”
Candle Media acquired a controlling stake in Hello Sunshine in August 2021 in a deal valued at $900 million. At the time, Hello Sunshine’s management projected the company would make more than $80 million in profit in 2023.
In November 2021, Moonbug was sold to Candle Media for about $3 billion. Other Candle Media acquisitions include Faraway Road, the producer behind Netflix’s “Fauda,” for $50 million, and the Gen-Z and millennial focused digital media firm ATTN for around $100 million.
Representatives for Candle Media, Hello Sunshine and Moonbug Entertainment did not immediately return TheWrap’s request for comment.