DHX looks to sell … something; Wow! Unlimited gets closer to TV screens

Did you know there’s a Peanuts anime?

It’s been a tough fiscal year for DHX Media. The Canadian kids content powerhouse reported revenues of $298.7 million, down from $304.8 million in 2016. More alarmingly, the company went from a net income of $27.7 million to a loss of $3.6 million. Most of the pain came from the fourth quarter, which saw the company lose $18.3 million compared to $1.7 million the year prior. The biggest issue is the company’s ever increasing debt, which was accelerated by their $345-million US purchase of Iconix Brand Group in May, which gives them ownership of the Peanuts and Strawberry Shortcake properties.

DHX primarily attributes their under performance to lower than expected revenue from Teletubbies in the United States, as well as management being preoccupied with the Iconix purchase. But as a publicly traded company, that’s obviously not enough to keep off investors, who helped the company’s share price fall from $6.40 to $5.00.

To help get the shareholders off their back, DHX is initiating an internal review of all their assets. This could result in “the sale of part or all of the Company, a sale of some of the assets of the Company, a merger or other business combination with another party, or other strategic transactions.” Or, as the company also theorizes, it could end up with absolutely no change at all. DHX has not set a time table for this review to be completed and will not comment on it until they feel the need to.

Canaccord Genuity analyst Aravinda Galappatthige stated the company could expect to sell the Family Channel business and a minority stake in its YouTube multi-channel network WildBrain for $100 million. DHX paid Bell $170 million Canadian for the four Family channels in 2013. In 2010, the company acquired WildBrain for $8 million. Galappatthige, however, doesn’t think that’s a likely outcome. “We, however, believe that the Family Channel can potentially be a useful asset alongside a multi-channel media group, which would be better positioned to derive synergies and reformat the network.”

Potential foreign buyers may be dissuaded due to being ineligible to take advantage of some of the production credits and tax breaks the Halifax-based company receives. Additionally, the CRTC would almost certainly require a local partner for the TV channels. The Canadian children’s content space has seen immense consolidation over the last decade, largely thanks to DHX. There aren’t a lot of potential suitors.

The future of DHX is now in the air. Who knows what’ll happen long term, but short term and relevant to this blog? Well, the company plans on launching their new Mega Man animated series next year on Cartoon Network in the United States and Family CHRGD in Canada. Jakks Pacific has already signed on as master toy licensee. In-this-would-totally-not-influence-their-financial-results-in-any-way-possible news, it also seems likely they’ll add Voltron: Legendary Defender to their TV lineup in the near future. The Netflix series from DreamWorks and Studio Mir has hit channels in the United Kingdom and a few other international markets, indicating the streaming service’s exclusivity window has now expired. DHX has a long term programming and production deal with DreamWorks.

There were two small updates on the Wow! Unlimited TV channel last month. On the 13th, the company announced that it had “executed a definitive asset purchase” with Bell Media for one of their category B channels. I think that means both parties have agreed to the terms that they previously said they agreed to. Riveting. The channel got its head of programming, or should I say, “Senior Vice President and General Manager.” Marni Shulman, who previously was the head of programming at the now defunct Rogers/Shaw streaming service shomi, will be “responsible for overseeing the launch of Wow!’s new multi-platform kids and youth brand as well as spearheading the execution of Wow!’s newly minted partnership with Bell Media.”

The rest is now up to the CRTC.

In some minor blog housekeeping news, I’ve added a widget on the right side of the site to give a spotlight to upcoming theatrical releases. They’re becoming so common that if I post a few early, they’ll get buried before the screening comes around. I’m open to tweaking the widget (or using a completely different one), so if you have any suggestions, feel free to leave a comment down below.

Speaking of theatrical releases, I also significantly updated the No Game, No Life Zero post. Azoland added some sub-only screenings.

Oh, one more thing:


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: