Witherspoon and Sarah Harden, Hello Sunshine’s CEO, will join the board of the new company and will continue to oversee day-to-day operations. They will also remain significant equity holders.
The Wall Street Journal first reported the news of Hello Sunshine’s sale. The still-unnamed media venture by Blackstone will be run by former Disney executives Kevin Mayer and Tom Staggs.
“Today marks a tremendous moment for Hello Sunshine,” Witherspoon said in a statement. “I started this company to change the way all women are seen in media. Over the past few years, we have watched our mission thrive through books, TV, film and social platforms. Today, we’re taking a huge step forward by partnering with Blackstone, which will enable us to tell even more entertaining, impactful and illuminating stories about women’s lives globally.”
Hello Sunshine received interest from multiple private equity companies and streamers after it began shopping itself. At one point, Apple, which produces Witherspoon’s “The Morning Show,” kicked the tires on the company, but it’s not clear how far the talks went. The sale of Hello Sunshine could spark a fresh wave of acquisitions of content companies, and comes as the likes of A24, Imagine, Legendary and Lebron James’ SpringHill Entertainment have all explored possible sales. Mayer and Staggs have been at the center of this deal-making, engaging in talks with SpringHill and Imagine as they look to roll up several smaller media companies, according to knowledgable insiders.
“We are thrilled to partner with Reese, Sarah, and the entire Hello Sunshine team,” Mayer and Staggs said. “Hello Sunshine is a perfect fit for our vision of a new, next generation entertainment, technology, and commerce company. We seek to empower creators with innovation, capital, and scale to inspire, entertain, and delight global audiences with engaging content, experiences, and products. Our platform will foster a uniquely creator-friendly culture that gives elite talent the resources they need to create and capitalize on their best, most inventive work. We look forward to backing Reese, Sarah, and their world-class team as they continue to produce and identify dynamic, engaging content for years to come.”
The price for Hello Sunshine is likely to raise some eyebrows in the entertainment industry. The company has brand recognition and a valuable celebrity ambassador in Witherspoon, but it lacks a deep library of content and only became profitable in 2020. But a source close to the situation said the valuation was not off the charts and based on a reasonable multiple of the revenue flowing through Hello Sunshine’s coffers. The company is poised to unleash a number of new projects and initiatives, including in the e-commerce arena that is a focus for the holding company of content-focused banners that Mayer and Staggs aim to build, with Blackstone’s bankroll.
“I’m thrilled with this new structure and what it means for us going forward,” Harden told Variety. “We have an incredibly ambitious growth agenda ahead.”
Hello Sunshine was founded in 2016 as a joint venture with AT&T’s Otter Media. It counts Laurene Powell Jobs’ Emerson Collective among its investors. Blackstone paid more than $500 million in cash to buy shares of Hello Sunshine, according to the Journal. It’s unclear if the pact and the valuation also encompass some kind of earn-out based on meeting certain performance benchmarks.
Hello Sunshine’s projects include the films “Gone Girl” and “Wild,” as well as “The Morning Show” and “Big Little Lies.” It also has the popular Reese’s Book Club. The company has recently moved into podcasting and into family entertainment — it has an upcoming slate of previously unannounced kids programming that it will produce for streamers.
Hello Sunshine will still look to partner with outside studios and distributors on producing its content, meaning that the Mayer/Staggs group does not immediately plan to deficit-finance its big-ticket film and TV productions. But more support from a parent company with deep pockets and a deep bench of industry experience in Mayer and Staggs can only help Hello Sunshine’s goal of advancing the cause of inclusion at all levels of the industry, Harden said.
“I certainly would anticipate that all of the partners we work with now we will continue to work on,” Harden said. “For us, we’ll continue to focus on defining those platform-defining shows. And we’re focused not just on what we do but how we do it. We’re intentionally working to change and transform this industry, creating opportunities for creators who have been structurally sidelined for decades.”
Cynthia Littleton contributed to this story.