WildBrain provided the following update with respect to its television broadcast business, including Family Channel, Family Jr., WildBrainTV and Télémagino (the "Channels"), and its previously announced definitive agreement ("Sale Agreement") to sell a majority stake in the Channels to IoM Media Ventures ("IoM"), an independent, Canadian-owned children's studio based in Halifax, Nova Scotia.
Following the recent decision from the Canadian Radio-television and Telecommunications Commission ("CRTC"), which found that WildBrain was not the subject of undue disadvantage from Bell Canada ("Bell"), WildBrain has been unable to negotiate a new carriage agreement for the Channels with Bell. As a result, Bell has informed the Company that it intends to remove the Channels from its distribution service.
In light of these events, WildBrain and IoM have entered renegotiations regarding certain commercial aspects of their Sale Agreement.
Josh Scherba, WildBrain's President and CEO, said: "Bell's decision to remove the Channels from its distribution service will require us to revise certain aspects of the transaction with IoM, but we are optimistic we can arrive at a deal that works for both of us. As one of only a few independent companies operating kids' and family channels in Canada, we are greatly disappointed that we could not come to an arrangement with Bell to continue supporting the Channels. For almost four decades, our Channels have played a vital part in the Canadian content landscape, providing opportunities for Canadian producers and artists to share their stories with audiences across the country. In fact, in just the last five years, our Channels have greenlit more than 15 seasons of original Canadian productions."
"WildBrain remains strong and vibrant as a leader at global scale in the kids' and family entertainment industry. We have operations and partnerships worldwide generating robust revenues across our 360-degree capabilities in consumer products licensing, content production and audience engagement. The sale of the Channels is part of an overall strategic objective to simplify and streamline our business to focus on key franchises, such as Peanuts, Strawberry Shortcake and Teletubbies. This strategy has not changed, and we have a clear path ahead as we continue in our commitment to harnessing high-growth opportunities and cash generation. Once we complete the IoM transaction, or exercise alternate options regarding control of the Channels, WildBrain will no longer be subject to applicable Canadian control restrictions under the Broadcasting Act. We then intend, in due course, to remove our variable voting structure currently applicable to non-Canadian shareholders. Moving forward, simplifying our voting structure to a single class will be a highly meaningful milestone in our trajectory, providing greater strategic flexibility and opportunities for WildBrain."
The Company maintains its Fiscal Year 2025 outlook and will provide additional detail on its long-term strategy and ongoing operations during its upcoming fiscal Q3 2025 earnings call.
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