Now that Candle Media‘s glow has dimmed further with the sale of its Hello Sunshine majority stake, fresh questions are being raised about the firm’s future.

The financials around the deal for Reese Witherspoon’s company, which she is buying back from Candle in partnership with France-based Mediawan, have not been disclosed. But one veteran financier familiar with the transaction told Deadline it likely represents a loss of several hundreds of millions of dollars for Candle. The main culprits: a $900 million valuation when the firm took a majority stake in Hello Sunshine in 2021 – a sky-high level given its output and lack of profitability – and dramatic changes in the media landscape of late.

Five years ago, Candle lit up with $2 billion in backing from private equity mainstay Blackstone. At the time, the industry was on a major streaming binge, and the company had two titans at the helm in co-founders Kevin Mayer and Tom Staggs. The two had spent years together in high posts at Disney, helping to pull off major M&A deals like the Pixar, Marvel and Lucasfilm acquisitions and the thunderbolt merger with Capital Cities-ABC that brought ESPN into the fold.

Today, industry observers wonder if the next logical move for Candle would be to swing a deal for the company’s main remaining asset, kids entertainment powerhouse Moonbug. Private equity firms, after all, view their funding and portfolios in terms of returns within years, not decades.

Moonbug, which produces CoComelon, is in better financial shape than many of its peers. But the nearly $3 billion Candle paid to acquire it has set a high bar. One source familiar with the strategic thinking of Mayer and Staggs says a deal to unload the company is not imminent but has been actively explored. As it has regrouped, Candle has cut staff and restructured from its origins as a buyer of assets to primarily an operator of them.

RELATED: Candle Media Restructures, Folding Animation Into Moonbug As Hello Sunshine Chief Sarah Harden Takes Over Rebranded Studio

A Candle rep declined comment when contacted by Deadline. Blackstone did not respond to a request for comment.

Difficulties for private equity-backed players extend far beyond the entertainment sector, and stem largely from higher interest rates. In an article about the increasingly tenuous state of small- and mid-sized private players, published Tuesday in parallel with the Hello Sunshine news, the Wall Street Journal quoted a banker as saying the situation is approaching a “period of reckoning.” As money returns to the sidelines, private equity fundraising is on track for its worst year since 2020.

The rate-driven increase in the cost of borrowing money is squeezing a lot of firms like Candle, given that they have to try to sell assets at even higher levels to account for the difference in rates. For those in the media business, however, demand for streaming programming is also receding as Netflix and other players tighten their belt and the industry braces for the impact of the Paramount-Warner Bros. Discovery merger. Skydance, their new parent company, is promising at least $6 billion in cost savings related to the deal. Podcast platforms, which once splashed cash around, have also cut their spending.

One of Candle’s early investments, along with Hello Sunshine, was a minority stake in Will Smith’s production company Westbrook. Less than three months after that deal was announced in January 2022, Smith became an industry pariah after slapping Chris Rock onstage at the Oscars, earning a 10-year ban from the Academy of Motion Picture Arts and Sciences. While Smith has returned to starring roles, the episode added another wrinkle to the already difficult task of profiting from film and TV production.

Along with Westbrook, the company invested in Spain-based Exile Content Studio and social media storytelling firm ATTN:.

No one who has done business with Mayer and Staggs or who is familiar with the company’s operations blames them personally for the firm’s struggles. It simply seems to be a case of unfortunate timing.

Given their largely charmed run at Disney, where each served a tour of duty at the company’s strategic planning division before rising to higher positions, both are sought-after and respected executives. Even after Candle’s founding, the pair were retained by former Disney CEO Bob Iger as consultants. David Zaslav brought Mayer in as he was about to close the Warner Bros. Discovery merger in 2021. Drawing on the expertise he developed at Disney overseeing the launch of Disney+ and leading a number of sports initiatives, Mayer also served as chairman of sports streamer DAZN just prior to Candle’s launch.

“We did move aggressively,” Mayer said of Candle during an appearance on a Deadline-moderated panel at last month’s Zurich Summit. “When I thought about what I wanted Candle to be, I wanted it to be a modernly configured media company that had a flywheel around great storytelling told by great storytelling.”

Candle spent some $4 billion on acquisitions, Mayer recalled, musing about how different that outlay is from the massive level of Disney and other giants. “There is a certain minimum scale you probably need to make an impact,” he said.

Moonbug, while it accounts for three-quarters of Candle’s spending, is a property with heft in the YouTube-driven creator economy. At the Zurich conference, Mayer noted that CoComelon‘s Netflix incarnation was the streamer’s most popular title from 2021-2024. The company’s YouTube channel gets 13 billion views a month, more than all of Disney including ESPN and four times the viewing of MrBeast.

“There’s no doubt they’d look to do a deal if they get an offer in the right ballpark,” one investor says. “But in today’s climate, is anybody going to step forward to make that kind of offer? That’s really the question.”

For Mayer and Staggs, despite their sterling reputations, “this is going to take some time for people to get over,” the investor added. “Though this business can have a short memory if the money is right.”

The White Lotus‘ Cannes takeover continues. As Season 4 of Mike White‘s HBO series is headed into the final stretch on its lengthy shoot, the mystery series has camped out at the famous Hôtel Martinez on Promenade de la Croisette six months after production on the new installment began at the French Riviera and five months after the show filmed scenes during the Cannes Film Festival.

Deadline reported in April that two hotels will be featured in the new season: Airelles Château de la Messardière in Saint-Tropez as the White Lotus du Cap and the Hôtel Martinez as the White Lotus Cannes. With filming underway, Hôtel Martinez has been transformed, and many set pieces and props are still displayed in the lobby. The White Lotus logo can also be seen everywhere, from furniture to windows and carpets.

Matching the art deco style of the Hôtel Martinez (with the font mimicking that of the actual marquee), the new While Lotus logo is a major departure from the ornate flowers featured in the first seasons. There had been small tweaks season to season as the series traveled to different locations — all of them telegraphed in the start of production slate photos that stealthily revealed the new logo (Including the Season 4 one). You can see below how The White Lotus hotel logo has evolved over the seasons.

White is reportedly shooting at Palm Beach this week, before a rumored weeklong shoot at the Martinez, which may have been booked out for the occasion.

Sets at the Martinez are blocked off with a sign that reads, “This is a fragile movie set, please do not touch or move any set elements.” This includes golden palm trees, a fake elevator, a replica of a check-in desk, a circular sofa and two blue arm chairs with a blue painting of a man hanging on the wall. White Lotus props like caps, towels, bags and scarves can also be found in the hotel lobby. You can see photos and videos in the Instagram post below.