- The Trump administration’s choice to dismantle USAID has made its way to Sesame Street, which had received funding from the agency. The iconic children’s show has faced other headwinds like Max deciding not to re-up its streaming contract.
The Trump administration’s efforts to slash federal funding have impacted agencies ranging from the Treasury Department to the Internal Revenue Service and the Federal Aviation Administration. Now the cuts are coming for Sesame Street.
The 55-year-old childhood television staple is produced through nonprofit Sesame Workshop, which has received funding from the U.S. Agency for International Development (USAID). But in late February, the Trump administration dismantled USAID at the urging of the so-called Department of Government Efficiency (DOGE) and its chief cheerleader, Tesla CEO Elon Musk. That’s been a painful loss for many organizations, not to mention nations that relied on humanitarian aid from USAID.
Like many other nonprofit organizations, Sesame Workshop was hurt by the recent federal grant cuts it “did not anticipate abruptly losing,” according to a report from the New York Times. The federal government has been considering shrinking Sesame Street’s funding through the Corporation for Public Broadcasting for more than a decade.
“Cuts to Sesame Workshop risk pulling the rug out from under children who rely on consistent, affirming media to support literacy, numeracy, emotional self-regulation, and identity formation,” Erica R. Williams, founder and executive director of St. Louis–based education justice and racial equity nonprofit A Red Circle, told Fortune.
President Donald Trump also called the the Arabic-language version of Sesame Street part of the “hundreds of billions of dollars of fraud” uncovered by DOGE, although the iteration of the show was historically supported by members of both parties.
Andrew S. Natsios, who led the U.S. Agency for International Development under President George W. Bush, even told the NYT the Arabic-language version of the show was the “biggest weapon against Al Qaeda and Islamic extremism.”
However, specific programs that supported Sesame Street performances overseas have since been eliminated.
“Fortune reporters are deeply out of touch if they believe that American taxpayers want to fund Sesame Street performances overseas,” White House spokesperson Anna Kelly told Fortune.
In the most recent fiscal year, federal funding accounted for 4% of the organization’s total funding. Its total assets in 2023 were $559 million, according to ProPublica data. Sesame Workshop also earns funding through distribution fees, royalties, and other licensed products and gets donations from foundations, corporations, and individuals.
Sesame Workshop declined to comment to Fortune about the effects of federal funding cuts.
Meanwhile, streaming platform Max decided in December 2024 it wasn’t going to renew its contract with Sesame Street in a move to divest from children’s programming. Since 2015, that deal has paid Sesame Workshop $30 million to $35 million per year for rights to the show, according to the NYT report. Sesame Workshop also recently cut about 20% of its staff to prevent a $40 million deficit in the next year, internal documents reviewed by the NYT show.
Plus, other children’s programming juggernauts like “Ms. Rachel” have stolen the attention of kids and parents alike. “Ms. Rachel” even landed a massive deal with Netflix after proving herself on YouTube, garnering millions of views on each of her videos. This has created a “perfect storm” for the organization behind Sesame Street, executives said, according to the NYT.
Early childhood education experts warn the demise of Sesame Street would be a threat to equity in child development.
“These cuts should sound alarm bells for anyone working at the intersection of education, race, and poverty,” Williams said. “The loss of Sesame Street—even partially—would widen the opportunity gap. The show’s accessibility through public broadcasting has historically filled learning gaps for children without access to preschool or structured early learning.”
Despite headwinds, Sesame Workshop CEO Sherrie Westin, who’s been with the organization for nearly three decades, said in an interview last year she was “confident” the organization could sustain Sesame Street.
“This is not a rejection of Sesame Street, and Sesame Street is not going away,” she told the NYT. “But we absolutely have a responsibility to change as the world around us is changing if we want to continue to deliver on our mission.”
