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Candle Media Trims Costs, Reorganizes Divisions Amid Streaming Spending Pullback

Etan Vlessing
·3-min read

Candle Media, the entertainment company backed by private equity giant Blackstone and headed up by former Disney executives Kevin Mayer and Tom Staggs, is reorganizing around two divisions, The Hollywood Reporter has confirmed.

The internal changes at Candle Media, first reported on by Semafor on Tuesday, will see animated series folded into the company’s children’s media company Moonbug Entertainment, which launched in 2018. Moonbug, which was acquired by Candle Media in 2021, creates and distributes Cocomelon and the series Blippi. 

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A second division, Candle Studios, to encompass live action content, will be led by Hello Sunshine CEO Sarah Harden. “I’m thrilled to take on an expanded role within Candle Media, supporting the growth of these incredible business units and identifying new avenues for growth. I am so proud of what we have built at Hello Sunshine and excited to continue in my role as CEO,” Harden said in a statement.

The company acquired Reese Witherspoon’s Hello Sunshine, which produces series like Big Little Lies and The Morning Show, in a deal valued at $900 million in 2021. Harden will remain CEO of Hello Sunshine, while leading Candle Studios.

“We are excited to announce that in order to continue to drive and enhance the collaboration and synergies that are core to Candle’s vision, mission and culture we have organized our live action, premium content capabilities into a newly formed CandleStudios division, which will be led by the incomparable Sarah Harden, who will serve as its CEO,” Candle Media Co-CEOs Kevin Mayer and Tom Staggs, added in their own statement.

The content slate at a consolidated Candle Studios has around 30 premium originals to be produced, including the second season of The Last Thing He Told Me, a fourth season for The Morning Show, Surface, Extreme Home Makeover and F1 Academy from Hello Sunshine. There’s also season two of Vgly for Max Mexico from Exile Content Studio, and season two of Crime Nation for CW and from Candle True Stories. Faraway Road is developing a fifth season of the Israeli drama Fauda, and an untitled feature film.

Candle Media, backed by investment capital from funds managed by Blackstone’s private equity business, has grown in recent years through pricey acquisitions, including for Hello Sunshine, Moonbug, Fauda maker Faraway Road Productions and a stake in Will and Jada Pinkett Smith’s Westbrook Inc.

But those buys left Candle Media saddled with debt — Bloomberg pegged the debt figure at $1 billion as of the end of 2023 — just as the era of Peak TV went bust and demand by global streaming players for original content has plateaued. The result is a company looking to cut operating costs as part of other internal initiatives to better monetize big-ticket acquisitions.

The new studios division will begin sharing back-end operations with Candle Media, including business affairs, legal affairs, production services, facilities and equipment, alongside a coordinated sales and distribution effort to target domestic and international buyers.

Mayer, the architect of Disney’s streaming strategy, had bet that the value of high-end content created and sold by independent studios like Candle Media would significantly rise amid streaming wars competition.

That was before the impact of the dual Hollywood strikes last year, which signaled the end of easy money to build out streaming platforms and generous and plentiful overall deals for talent to star in original content movies and series.

Now as higher interest rates raises Candle Media’s debt costs, the indie studio business has just got that much harder to turn a profit in as major investors look for quality and returns on investments.

July 3, 7 a.m. Updated with statements from Sarah Harden and Candle Media principals Kevin Mayer and Tom Staggs.

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