AT&T closed the sale of its anime streamer Crunchyroll to Sony’s Funimation Global Group for $1.175 billion in cash. Funimation is a joint venture between Sony Pictures Entertainment and Sony Music Entertainment subsidiary Aniplex. According to Sony Pictures chair and chief executive Tony Vinciquerra, the goal is to “create a unified anime subscription experience as soon as possible.” The two services will remain separate initially. Crunchyroll currently has 5+ million paying subscribers globally and 120 million registered users in 200+ countries.

Variety reports Vinciquerra added that, “with the addition of Crunchyroll, we have an unprecedented opportunity to serve anime fans … across any platform they choose, from theatrical, events, home entertainment, games, streaming, linear TV.”

Sony Pictures Television “bought a controlling stake in Funimation in 2017 for $143 million,” and in 2019, Gen Fukunaga, who founded Funimation in 1994, stepped down from daily management. Sony Group chair and president Kenichiro Yoshida noted that, “anime is a rapidly growing medium that enthralls and inspires emotion among audiences around the globe.”

“The alignment of Crunchyroll and Funimation will enable us to get even closer to the creators and fans who are the heart of the anime community,” he said.

Crunchyroll, which was founded in 2006, became a part of WarnerMedia “after AT&T bought out Chernin Group’s majority stake in Otter in 2018.” AT&T has recently spun off DirecTV and is “currently in the process of divesting WarnerMedia to combine it with Discovery, a deal expected to close in mid-2022.”

Eurogamer notes that, Sony “is already a key player in the anime-streaming market via its existing service Funimation.” After Vinciquerra stated the goal is to “create a ‘unified’ subscription experience,” Eurogamer suggests Sony is considering “a linked paid option” and says, “there are also plans to potentially offer Crunchyroll as part of a more expensive premium PlayStation Plus offering.”

Deadline reports that the Funimation/Crunchyroll deal was first announced in December last year, “but reports surfaced in the spring about regulatory concern about the concentration of anime assets under a single corporate roof.” Crunchyroll offers “AVOD, mobile games, manga, events merchandise and distribution.” It notes that, in addition to its other recent transactions, “AT&T has parted with a 10 percent stake in Hulu, its headquarters building in New York and Latin American DirecTV subsidiary Vrio.”

The moves are an attempt to chip away at its debt, which was $180 billion in 2018. The company’s current plan, says Deadline, “is to lower its net debt-to-adjusted EBITDA ratio to below 2.5 times by year-end 2023, from the range above 4x where it has been in recent years.”