In 2021, Candle Media co-CEOs Tom Staggs and Kevin Mayer took a massive bet on Reese Witherspoon’s Hello Sunshine when they acquired a majority stake in the company at a head-scratching $900 million valuation.
Financial experts questioned the decision. But at the time, they were confident. “This is a new-fashioned model that we’re pursuing,” Mayer told TheWrap at the time. “And I honestly think this is where successful media companies will all gravitate towards, but we’re kind of leading the charge.”
Did the former Disney executives see something in Witherspoon’s production company and fast-growing book club that no one else could?
It turns out — no, they did not.
“We were just wrong,” said an individual close to Candle Media. “This isn’t a great deal in comparison to what we paid. It’s not a great outcome for Blackstone.”
Just five years later, the “Legally Blonde” star has teamed up with French media conglomerate Mediawan to buy her company back for “low to mid eight figures,” according to a person familiar with the terms of the transaction. A generous estimate would peg that at around $50 million. And while it’s unclear if those terms encompass just a stake or the whole value of Hello Sunshine, either way it still represents just a fraction of that 2021 valuation — a plunge of up to 94%.
The Hello Sunshine sale is a stunning loss for the Blackstone-backed media company, which had hoped to capitalize on a celebrity-led brand and the massive reach of Reese’s Book Club, a community of more than 6.2 million book fan members launched in 2017 that has doubled as a funnel for other products, as well as TV and film development.
Insiders told TheWrap that many external factors impacted the lackluster growth of Hello Sunshine, whose original CEO Sarah Harden exited last year. That included Hollywood’s dual labor strikes in 2023, major studios’ subsequent pullback in spending and a decline in advertising.
But mainly it was due to the company’s slow growth in the area that was the biggest new opportunity: direct to consumer subscription revenue. Witherspoon herself turned out to be less interested in driving that business than in making films and television shows like the Apple TV series ‘The Morning Show,” in which Witherspoon starred.
The idea behind the company was that Witherspoon would drive a celebrity-led fan base to buy her recommendations beyond the book club, and that she would draw other women creators who would be brands to scale the business as a direct-to-consumer powerhouse.
“This was not the piece Reese wanted to lean into as much as we want,” said the insider at Candle Media. “She likes making films… They did make very high quality scripted series and a handful of films. They did a good job on branded direct to consumer, but there was less of that to do.”
Already in 2023, Hello Sunshine was lagging behind projections. According to Bloomberg, Candle was on track to post a profit of around $140 million to $170 million that year, with Hello Sunshine accounting for just 10% of the projected earnings. The children’s entertainment brand Moonbug was much more successful and accounted for about 30%. That’s below an earlier estimate of $330 million.
At the time, a Blackstone spokesperson told TheWrap that those figures were not Candle management or the firm’s projections, which were “substantially more conservative” when it underwrote its initial investment. It also expressed confidence that Candle was “well-positioned” for future earnings growth.
Candle Media also struggled to expand its lineup of female creators beyond Witherspoon, who was ultimately more interested in leaning into producing films and scripted series under the partnership. Hello Sunshine’s notable credits under Candle Media’s ownership include Apple’s hit series “The Morning Show,” which will conclude with its upcoming fifth season, and other Apple series “The Last Thing He Told Me” and “Lucky,” as well as Prime Video limited series “Daisy Jones & the Six” and the 2022 Focus film “Where the Crawdads Sing” — all of which were based on popular books.
Projects produced prior to the Candle Media acquisition include “Big Little Lies” and “Little Fires Everywhere.”
The deal sparks questions about Candle Media’s future as the company loses a flagship brand. As of the end of 2023, it was saddled with approximately $1 billion in debt following an acquisition spree. In addition to Hello Sunshine, the company acquired Moonbug Entertainment for about $3 billion, Faraway Road Productions for under $50 million and a minority stake in Will and Jada Pinkett Smith’s Westbrook Inc. for an undisclosed amount. It also sold its majority stake in the Gen Z and millennial-focused digital media firm ATTN for an undisclosed amount in February after acquiring the company for around $100 million in 2022.
“Candle paid up big for the idea that a female-audience brand could become a lifestyle and commerce platform. That didn’t happen, most likely because Candle didn’t add anything that Hello Sunshine couldn’t get on their own, like distribution, eyeballs, commerce, data,” Qualia Legacy Advisors managing director Aaron Meyerson told TheWrap. “Without that layer, the synergy evaporated and the pieces are worth more apart than together. Candle is now in harvest, not growth, mode.”
Representatives for Candle Media, Mediawan and Hello Sunshine declined to comment. Blackstone and Witherspoon did not return TheWrap’s request for comment.
A founder takes back her company
The sale of Hello Sunshine comes after the studio reportedly dragged down Candle Media’s 2023 earnings below its initial forecasts.
The following year, Candle restructured its business to cut costs. It appointed Harden to lead a new division called Candle Studios, which was tasked with overseeing live-action projects out of Witherspoon’s production company, as well as other properties including Exile, True Stories and Faraway Road. It also folded animated projects into Moonbug Entertainment, which is known for “CoComelon.”
Harden exited Candle Media in 2025 and was replaced by direct-to-consumer head Maureen Polo, who expanded Hello Sunshine’s DTC business through offerings including the experiential franchise Shine Away, the Bright Side Podcast, the in-house social agency Solar and the Gen Z-focused media and lifestyle brand Sunnie.
Polo is not expected to stay with the company post-purchase.
Despite taking a several hundred million dollar loss on Hello Sunshine’s sale, the insider emphasized the deal with Witherspoon and Mediawan was “driven by where Reese wants to be” and worth taking a bigger haircut to make sure she was accommodated.
“Reese was a critical factor in getting it done,” the insider added. “Without Reese fully engaged and energized, there’s no value.”
In addition to Witherspoon herself, a second insider familiar with the deal told TheWrap that The Chernin Group’s Peter Chernin and Jesse Jacobs, who were original shareholders in Hello Sunshine who helped launch it in 2016, were key to the deal and presented the opportunity to Mediawan co-founder and CEO Pierre-Antoine Capton.
Chernin is also a board member at Mediawan, which oversees the Chernin Entertainment label and acquired Chernin’s The North Road Company.
What does Hello Sunshine’s sale mean for Candle Media’s future?
While Candle may have lost Hello Sunshine to Mediawan, the insider argued that its “anchor asset” is Moonbug Entertainment, which accounted for the majority of its profits in 2023.
Though Meyerson said Candle and Blackstone could consider selling Moonbug to a strategic buyer such as a toy or family entertainment company or a studio looking for a preschool franchise, he questioned whether they could get a price that makes their overall investment “look respectable.” He added that “the endgame for Candle is effectively the endgame for Moonbug” and that it may be a better option to hold onto it and let it continue generating cash.
“It’s a genuinely good business. CoComelon and Blippi are global preschool franchises with YouTube scale, streaming deals, and consumer products and live upside,” Meyerson said. “The challenge is the nearly $3 billion Candle paid for it, which set a very high bar.”
Moonbug will release its first “CoComelon” feature film, produced by DreamWorks Animation, through Universal Pictures in February in a bid to expand that franchise’s footprint even further.
As for the rest of the portfolio, Meyerson said Candle Studios’ smaller live-action labels Exile, True Stories and Faraway Road could get sold, spun back to their founders or wound down, while Candle’s minority stakes can get monetized when there’s an available buyer.
“Candle Studios was built around Hello Sunshine as its anchor. Without it, there’s no reason to carry a separate live-action division and its overhead,” Meyerson said. “The corporate layer shrinks to a lean holding company whose real job is managing Moonbug and the balance sheet.”
The Future with Mediawan
Bullseye Entertainment founder and former NBC Studios president Tom Nunan told TheWrap that Hello Sunshine is complementary to Mediawan’s existing U.S.-based production labels. In addition to Chernin Entertainment, those include Kinetic Content, Plan B Entertainment and Blue Morning Pictures.
Other production companies included in Mediawan’s nearly 100 labels are See-Saw Films, LuckyChap International, Misfits Entertainment, Palomar and Our Films. Together, those various studios produce more than 450 titles each year, with notable credits including “F1,” “Adolescence,” “Slow Horses,” “The Count of Monte Cristo,” “Miraculous,” and “Call My Agent!”
Nunan expects Mediawan to make a “more robust” investment in Hello Sunshine while preserving its independence.
“Hello Sunshine brings a lot of value. It’s a nice jewel in Mediawan’s crown,” he said. “They probably just want to support the potential that the brand already has established.”
Capton praised Witherspoon as a “generational talent” and said Hello Sunshine’s distinctive creative identity and a direct audience relationship would strengthen its offering to talent and buyers. Witherspoon added that Mediawan’s creator-first approach has always been her vision for Hello Sunshine and called it a “perfect home for this new media landscape.” She added that the deal is a “homecoming,” given her reunion with Chernin and Jacobs.
“I’m deeply proud of what our incredible team has built, and grateful to Blackstone and Candle Media for their partnership and unwavering support,” Witherspoon concluded. “The best is still ahead.”
