Private equity takes Hollywood, Cannes, and everything in between

Future. Private equity (PE) firms are turning up at Cannes as it looks to the film and TV industry as the next investment goldmine — hoping to capitalize on the streamers’ arms race for content. With the major studios mostly focused on blockbuster fare, the PE money may be responsible for a boom of lower-budget, independent productions that plays a key part in supplying streamers with content.

Suits on the call sheet
According to THR, investor dollars have dreams of Hollywood stardom.

• In the U.S., PE money has poured into Reese Witherspoon’s Hello Sunshine and Will Smith’s Westbrook (Blackstone via Candle Media), Kevin Hart’s Hartbeat (Abry), and Lebron James’ SpringHill (RedBird).
• In Europe, mini-major studios Leonine and Mediwan both have backing from PE (KKR & Co.), as does growing producer/financier Anton (Falcon) and Luc Besson’s EuropaCorp (Vine Alternative Investments).

Also, the incoming president of the Cannes Film Festival, Iris Knobloch, is also the head of a PE-backed group, I2PO, which is making entertainment investments across Europe.

Flex being flexible
So why is Wall Street all of a sudden so interested in the film and television industry? As the streaming wars wage, PE firms see an opportunity to be arms suppliers to every side. Everyone needs content (and a lot of it) in order to compete. PE firms see an opportunity to multiply their money as demand skyrockets (especially in Europe, which has a strict 30% quota of how much European content streaming platforms need to buy to operate in the continent).

The key is that these production companies must abide by one mandate: stay independent. And by doing so, they get to be the ones that everyone fights over.