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THE INVESTMENT GUIDE

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Sweeping the clouds away: CEO Jeffrey Dunn turned around Sesame Workshop’s finances with an HBO deal.

been hired as the first outsider to head the months. After that period, PBS stations test adaptive learning for preschoolers.

insular organization. Sesame needed a “fi - would get those shows for free. What about the philanthropy and social
nancial turnaround, a cultural turnaround “It totally changed our economics,” impact side of Sesame? It, too, seems to be
and a strategic turnaround,” says Harvard Dunn says. “It replaced that lost revenue thriving. In December, Sesame Workshop
Business School professor Rosabeth Moss from the DVDs and other merchandise, and the International Rescue Committee
Kanter, who is director of the Harvard and we totally stopped the bleeding.” In the started work on a new, regional version of

Advanced Leadership Initiative and a co- fiscal year ended June 2014, Sesame had an Sesame Street that aims to reach 9.4 million
author of a case study on Sesame. operating loss of $11 million on revenues Syrian refugee and local children in Jordan,
Perhaps Dunn’s most signifi cant of $104 million. In 2017 it had an operat- Lebanon, Iraq and Syria with material

structural and cultural change: He cre- ing profit of $6.7 million, on revenues of more relevant to their experiences and cul-
ated two business units. One was for $118.5 million. ture. It’s funded by a $100 million fi ve-year
Sesame’s philanthropy and social impact As he did with revenues, Dunn took grant from the MacArthur Foundation,

work, mostly funded by foundations and a bold approach to another Sesame prob- which notes that before this effort less than
government. The other ran Sesame’s TV, lem—keeping up with changes in educa- 2% of global humanitarian aid money was

media and licensing operations; it would tion technology and in how media is con- being spent on education, and only a sliver
have to operate with an eye to the bottom sumed. He axed a four-year-old internal of that 2% on young children.

line. “People thought ‘nonprofit’ meant we innovation lab that had produced no viable “The Syrian refugee crisis is the hu-

don’t have to make money, or we can lose products and launched Sesame Ventures manitarian issue of our time,” Dunn says.
money,” Dunn says. “Nonprofit is a tax to invest in startups focused on children’s “These children are, arguably, the world’s

status: If your revenues don’t exceed your education, development and health. At most vulnerable on the planet, and by
expenses, you don’t stay in business—it is Harvard, Dunn says, “I was going to school improving their lives we create a more
not sustainable.” with all these kids, sitting there and listen- stable and secure world for us all.” Th e new
That new ethic led to Dunn’s most ing and talking to them, and knowing full program will be distributed via television,

audacious move. For 45 years the Pub- well most of these things happen from mobile and digital platforms, with extra
lic Broadcasting Service had been the startups, not existing players.” educational content given to parents, clin-
home of the Sesame Street television So far, Sesame has invested in more ics and child development centers.

show, where generations of preschool- than 40 startups, including Epic!, which These days, Dunn makes a weekly
ers learned to recognize letters and love gives kids and teachers access to a person- eight-hour round-trip commute via Am-
Cookie Monster. But what PBS was alized digital library of high-quality trak from his Boston home to Sesame’s
paying for broadcast rights covered less ebooks, and Kano, which sells kits to Manhattan headquarters. But he’s not
than 10% of production costs. So in 2015 teach children computer coding. “You complaining. “You don’t get the oppor-
Dunn negotiated a fi ve-year licensing can’t force people inside, who’ve been tunity many times in life to really change
deal with HBO, the premium cable chan- doing it the same way forever, to change the world, but this may be one of them,”
nel known for its edgy and sometimes vi- their habits,’’ Harvard’s Kanter says. he says. Sure, this isn’t exactly volunteer
olent content. HBO would pay enough — “When you partner with those startups work—Dunn’s offi cial compensation in
an estimated $20 million-plus a year—to and connect them to the people inside, 2016 is listed as $689,000, though he says
cover most of Sesame Street’s production new creative sparks begin.” Sesame is also he declined to take all of it. “You only need JAMEL TOPPIN FOR FORBES
costs and would get the right to air newly completing a pilot program with IBM that so much money,’’ Dunn concludes. “But
produced episodes exclusively for nine pairs its characters with IBM’s Watson to you can’t sit on the sidelines.” F

112 | FORBES FEBRUARY 28, 2018