Private equity sees dollar signs in Hollywood

The Future. Private equity firms see major growth opportunities in the content-creation market, and they are investing more in Hollywood and independent entertainment studios as a result. While studios are very down for PE firms to open up their wallets, some executives fear that investors might try to steal some of their decision-making power and creative license along the way.

Lights, camera, cash

A number of private equity firms already invest in the major talent agencies, and many are now expanding into production entities. They see promising ROI on studio real estate and an ever-increasing demand for high-quality content that will serve as steady cash flow.

• Candle, a media firm backed by Blackstone, has made hefty investments in studios, including Reese Witherspoon’s Hello Sunshine and Will and Jada Pinkett-Smith’s Westbrook Media
• LeBron James’ SpringHill Entertainment sold a stake to RedBird Capital
• Brian Grazer and Ron Howard’s Imagine Entertainment is in talks to sell to a London-based firm
• Hackman Capital Partners, a real estate investment firm based in Culver City, CA, is racking up its studio investments, including the CBS lot in Studio City

The hype for Hollywood investment aligns with FX’s annual “Peak TV” report, which tracks the number of shows across streaming, cable, and broadcast outlets hitting an all-time high, with a 13% jump from 2020.

Creative in question
Studios love the cash but are nervous about maintaining their creative license. Some studio execs worry that the investment firms will try to dictate decisions on content genres, casting, and creative strategy. The way studios sign their deals with investment firms could greatly shape the future of Hollywood.