AT&T (T) - Get Report said will sell its Crunchyroll anime business to Funimation Global Group, a joint venture between Sony (SNE) - Get Report Pictures Entertainment and Sony Music unit Aniplex, for $1.18 billion cash.
Shares of the Dallas telecommunications giant at last check were off 0.3% to $31.36. Sony, the Tokyo entertainment group, was little changed at $94.
Founded in 2006 by a group of students from the University of California at Berkeley, Crunchyroll is a direct-to-consumer service within AT&T’s WarnerMedia segment. It has more than 3 million subscription-video-on-demand subscribers.
The company has 90 million registered users in more than 200 countries and territories offering advertising video on demand, mobile games, manga, events merchandise and distribution.
AT&T purchased Crunchyroll as part of Otter Media in 2018 from Chernin Group for a reported more than $1 billion.
In addition to Warner Bros., AT&T owns such brands as HBO, HBO Max, TNT, TBS, truTV, CNN, DC Entertainment, New Line, Cartoon Network, Adult Swim and Turner Classic Movies.
Funimation has a library of more than 700 anime series and 13,000 hours of content, which are shown in nearly 50 countries, CNN reported. The business also reaches fans by distributing films and selling collectibles.
"The Crunchyroll team has done an extraordinary job of not only growing the Crunchyroll brand but also building a passionate community of anime fans," Tony Goncalves, WarnerMedia's chief revenue officer, said in a statement.
Anime has been a growing industry, rising to around $24.08 billion in 2019, the Association of Japanese Animations said last month. The industry has expanded for a 10th consecutive year and has almost doubled in size since 2009.
Separately, The Wall Street Journal reported that AT&T has garnered bids for DirecTV that valued the division at more than $15 billion, including debt.
AT&T is trying to pare its heavy debt load and DirecTV has struggled since AT&T paid $63 billion for it in 2015.