By Sahil Patel
Sony Pictures Entertainment, which is reeling from a devastating cyber-attack at the hands of a hacker group that calls itself the “Guardians of Peace,” recently considered selling off a majority stake in its online video service Crackle.
According to leaked emails obtained by Bloomberg, Crackle head Eric Berger met with Evolution Media Capital, an investment bank backed by CAA, about a potential deal.
In a separate email sent August, Andy Kaplan, president of worldwide networks at Sony Pictures Television, said selling a majority stake in Crackle could help improve the parent company’s 2014 balance sheet. “If we sold 51% control at a total valuation of $200 mi, for the sake of the example, we’d bring in $100 mil in cash and probably more importantly, book a gain of something like $125 mil,” that particular email read.
A partial sale of Crackle could also land more cash for Sony to spend on original series and marketing, according to an email Berger wrote to Sony Pictures Television president Steve Mosko. Crackle plans to spend $10 million to license content in 2015, said Berger.
Sony bought Crackle for $65 million in 2006, back when the service was known as Grouper. Rebranding it to Crackle in 2007, the service offers licensed movies and TV shows, and in the last several years has also expanded to acquire and produce original series. Its most famous title is Jerry Seinfeld’s “Comedians in Cars Getting Coffee.” The company is also in production a sequel to the David Spade-starring comedy film “Joe Dirt.”
This news comes at a time when there is a lot of M&A activity in online video, jumpstarted by Disney’s acquisition of Maker Studios earlier this year. Since then, companies ranging from Vice Media to Funny or Die have raised money or explored potential sales.
As for Sony, there appears to be no end in sight from the GOP cyber-attack, which stole thousands of documents from Sony computers, including salary spreadsheets on Sony employees and salacious email chains between Sony executives and Hollywood producers and talent.