Chernin Entertainment plots an expansion

Future. Chernin Entertainment is looking to acquire companies to scale up and go public. By taking an IPO route (vs. procuring further investment), Chernin may be signaling ambitions to become a new mini-major studio in the mold of A24 (not a public company) or Lionsgate (a public company). But with its eye also on still selling to streaming services, the next era of mini-majors could be one that finds them mostly focused on supplying content to much-larger platforms  — like how Sony and Paramount did during the pandemic.

Production powerhouse
Chernin Entertainment is looking to diversify its development slate.

• The production company, run by the legendary Peter Chernin, is reportedly looking to make acquisitions that could scale the company up quickly.
• One possibility is acquiring Red Arrow Studios, which is behind Amazon’s Bosch and Netflix’s Love is Blind.
• The hope is to grow the company — behind such hits as Ford v. Ferrari, the Planet of the Apes franchise, and See — to go public in the next three years.

The plans come on the heels of Chernin exploring investment options, including selling a minority stake to private equity firm Carlyle Group.

Additionally, Chernin struck a deal with Spotify in 2020 to adapt podcasts into film and TV properties… and also turn Chernin-owned projects into podcasts.

Mini moguls
Chernin is part of a growing list of production companies looking to scale up due to the rise of streaming, which is behind an unprecedented content-buying spree. Since the streaming business model requires platforms to buy out a producer’s backend on the project right from the start, production companies’ earnings are more predictable than in years past (no more waiting for the backend to kick in down the line — a double-edged sword).

Reese Witherspoon’s Hello Sunshine, Lebron James’ SpringHill Company, and Ron Howard and Brian Grazer’s Imagine Entertainment have commanded sky-high investment or sales because of that hype… and Chernin already has a rich first-look deal with Netflix, putting it in a great position.

But Chernin is also much bigger than those companies — and it’s not predicated on its celebrity branding, so it may hew closer to an entity like financier and distributor A24, which was exploring a $3 billion sale before taking a $225 million equity investment. Chernin already has the capability to finance projects on its own, so, with a public offering in the works, could Chernin want to become a mini-major distributor itself?