The Hollywood Reporter (Weekly)
WHY HOLLYWOOD IS PRIVATE EQUITY’S NEW MONEY MACHINE
Private equity is doubling down on Hollywood.
After dipping their toes in the water through the talent agencies — TPG owns a majority stake in CAA, while Silver Lake is the largest external shareholder in Endeavor — investment firms have been snapping up stakes in production entities or financing new vehicles like Kevin Mayer and Tom Staggs’ Candle Media to do the buying for them. Candle, backed by Blackstone, bought stakes in Reese Witherspoon’s Hello Sunshine and Will and Jada Pinkett Smith’s Westbrook Media and has acquired outright Cocomelon owner Moonbug and Fauda producer Faraway Road. Meanwhile, Ron Howard and Brian Grazer’s Imagine Entertainment is engaged in talks to sell a majority stake to the London-based firm Centricus; LeBron James’ SpringHill sold a stake to RedBird Capital; and Village Roadshow and Chernin Entertainment, sensing opportunity, are exploring their options.
As for what’s causing the demand, look no further than the annual Peak TV data released Jan. 14 by FX Networks. It showed that streaming services and broadcast and cable channels last year presented a record 559 English-language scripted series, up 13 percent from pandemic-impacted 2020. “There’s folks looking for a lot of supply,” a top agency source says. The bet is that the amount of original programming, especially from blue-chip talent, will
not abate anytime soon and might even continue to increase as streamers seek to stand out. In other words, Peak TV hasn’t peaked. Meanwhile, talent like Witherspoon, Smith and James are on board with the PE cash as well, knowing that their financial backers have deep pockets and are willing to sell to the channel or streaming service willing to cut the best deal. By contrast, every entertainment conglomerate is increasingly creating films and TV shows for their owned services. “Nobody wants to be dictated to where and how and what they can create,” notes one longtime studio executive of the push by PE into star-backed studios. “This represents what may be a very important new paradigm for the future.”