‘Sesame Street’ looking for new home for first-run episodes

Warner Bros. Discovery has announced it will no longer fund the production of new episodes of “Sesame Street” that have had their first-run airings on HBO and Max, meaning the production of new episodes of the children’s classic could be halted.

The announcement means that “Sesame Street” has been effectively canceled by HBO but could end up continuing under a different production and funding model.

Back in 2015, HBO signed a deal to cover the “Sesame Street” production costs in exchange for getting first-run rights to the show. The new episodes would air several months later on its traditional home of PBS member stations.

“Sesame Street” reportedly costs around $25 million a year to produce. The show is produced by Sesame Workshop, the entity originally known as Children’s Television Workshop, a nonprofit organization that produces a variety of programming as well as handling licensing rights to characters on its shows. Its best-known show is “Sesame Street.”

The show moved to HBO Max, which is now known as Max, in 2019, after the terms of its deal with Sesame Workshop were renegotiated. 

While WBD and Sesame Workshop did not renew the new episode deal, it did extend its relationship with production company to continue to carry repeats of “Sesame” until 2027. It was not immediately clear if WBD was interested in renewing the deal, perhaps at a lower price point that was not acceptable to Sesame Workshop.

When Sesame Workshop and HBO signed the deal in 2015, it was heralded as both an innovative way to fund production of educational programming amid decreased funding, higher costs and a further commercialization of the program. Detractors also took issue with the fact that most of HBO’s other programming at the time had adult themes and that moving the once mostly-free-to-air program to a premium subscription service would give families who could afford a membership even more of an advantage when it came to access to educational content.

“Sesame Street” could continue production and continue releasing new episodes if a new funding source or production model can be found.

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This could include a deal with another streamer, television network or other corporate entity. Sesame Workshop could also, in theory, fund production itself, though it appears doing so would require a significant shift in its budget.

Given the power of the Sesame Street brand, there could be potential interest for another outlet to snap up the rights. This could include the over 4,000 back episodes of the show as well, though it’s not clear if WBD will retain exclusivity on those rights until 2027.

The show could prove appealing to other streamers, who often offer a collection of children’s content. 

For its part, Sesame Workshop indicated it will announce plans for future “distribution” in the future, though it did not specifically mention the production of the show.

Leadership has been preparing to revamp the show with its 56th season, which would be produced outside of the WBD deal. Plans, which have been in place since at least October 2023, call for the program to shift from its magazine-style format to longer stories told in a narrative style that would appear alongside “Tales from 123,” a new animated series. 

It’s important to understand that Sesame Workshop and the “Sesame Street” show and brand are separate from PBS. 

PBS itself receives a small amount of federal funding and serves as a clearinghouse of sorts for shows such as “Sesame Street,” “Nova,” “Masterpiece” and the “PBS News Hour.” It has numerous member stations around the country in both major media markets and more rural areas.

Unlike a traditional network-affiliate relationship, however, the stations tend to operate with much more autonomy in terms of scheduling and programming lineups. These stations pay fees for carrying programs they don’t produce, including to Sesame Workshop for the rights to carry newer and older episodes of “Sesame Street.”

Much of the federal funding allocated to PBS ends up subsidizing the costs of smaller member stations, many of which are in rural areas, who aren’t able to cover all their costs through local sponsorships or fundraising.