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Equity Method Investment
 12 Months Ended
Dec. 31, 2023
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investment Equity Method Investment
The Company owns an interest in a joint venture, Discovery Family Channel (the “Network”), with Warner Bros. Discovery, Inc. ("Discovery"). The Company has determined that it does not meet the control requirements to consolidate the Network and accounts for the investment using the equity method of accounting. The Network was established to create a cable television network in the United States dedicated to high-quality children’s and family entertainment. In October 2009, the Company purchased an initial 50% share in the Network for a payment of $300.0 million and certain future tax payments based on the value of certain tax benefits expected to be received by the Company. On September 23, 2014, the Company and Discovery amended their relationship with respect to the Network and Discovery increased its equity interest in the Network to 60% while the Company retained a 40% equity interest in the Network.
As of December 31, 2023 and December 25, 2022, the Company’s investment in the Network totaled $102.0 million and $120.8 million, respectively.
During the Fourth quarter of 2023, the Company reviewed its investment in the Network for impairment. Due to decreases in forecasted revenues, the Company concluded that the fair value of the Company's interest in the joint venture was less than its carrying value. As a result, the Company recorded an impairment loss of $1.3 million in Other expense (income), net in the Consolidated Statements of Operations for the year ended December 31, 2023.
The Company utilized the discounted cash flow method under the income approach to estimate the fair value of the Network, which requires assumptions and estimates that include: future annual cash flows, income tax rates, discount rates, estimated growth rates, and other market factors. Accelerating changes in the cable distribution industry, including technological changes and expanding options for digital content offerings, has resulted in the fragmentation of viewership, declines in subscribers to the traditional cable bundle, and pricing pressure. These factors led to the lower valuation of the Network as compared to its carrying value. During the fourth quarter of 2022 the Company reviewed its investment with Discovery for impairment and determined that the fair value of the Company's interest in the joint venture exceeded its carrying value, and as such, concluded that there was no impairment in its investment in the Network at that time.
The Company’s share in the earnings of the Network for the years ended December 31, 2023, December 25, 2022 and December 26, 2021 totaled $10.9 million, $8.1 million and $20.8 million, respectively, and is included as a component of Other expense (income), net in the Consolidated Statements of Operations. The Company also enters into certain other transactions with the Network. During 2023, 2022 and 2021, these transactions were not material.
In connection with the September 23, 2014 amendment, the Company and Discovery entered into an option agreement to acquire the Company’s remaining 40% ownership in the Network, exercisable during the one-year period following December 31, 2021. During 2022 the Company and Discovery further amended the agreement by extending the option exercise window through March 2025. As of December 31, 2023, the Company had not exercised the option to acquire the remaining ownership in the Network. The exercise price of the option agreement is based upon 80% of the then fair market value of the Network, subject to a fair market value floor. At December 31, 2023 and December 25, 2022, the fair market value of this option was $1.7 million and was included as a component of Other liabilities. There were no material changes to the option's value in 2023 or 2022.
The Company also has a related liability due to Discovery under the existing tax sharing agreement. The balance of the associated liability, including imputed interest, was $9.0 million and $14.4 million at December 31, 2023 and December 25, 2022, respectively, and is included as a component of Other liabilities in the accompanying Consolidated Balance Sheets. During 2022 the Company recognized income of $0.7 million related to this liability due to changes in the Company's 2021 income tax rate that resulted in adjustments to future payments owed to the Network. There were no such adjustments made during 2023. During 2023, 2022 and 2021, the Company made payments to Discovery under this tax sharing agreement in the amount of $5.7 million, $5.4 million and $5.3 million, respectively. See note 20 for more information on estimated future payments in relation to the Company's Discovery tax sharing agreement.