I wrote about a surprising shortage of indie films and eight VC players and 14 private equity firms ready to pounce on Hollywood, and spoke to Media Res CEO Michael Ellenberg about what shows are selling now.
When Blackstone-backed Candle Media invested in Reese Witherspoon’s Hello Sunshine at a $900 million valuation in 2021, the heavy-hitting private equity player probably didn’t expect to sell it back to her in partnership with Mediawan for far less than 10 percent of that number five years later.
No matter how you slice it, it’s both a humbling outcome and a cautionary tale for Hollywood’s once rah-rah private equity investors who overpaid to get into business with star production shingles and are already chasing the next gold rush.
Witherspoon’s startling reversal raises a big question: What happens now to the other Hollywood stars whose companies attracted hundreds of millions of dollars in investment during the free-spending early 2020s? And where is private equity’s dry powder going to go now?
I’ll answer both questions below.
Today I talk to entertainment entrepreneurs and investors Ed Simpson and Thai Randolph about what sent Hello Sunshine’s valuation plunging — and what Hollywood’s private equity reckoning means for the next generation of dealmakers.
Below:
- What Candle Media got so wrong — and why Mediawan thinks Hello Sunshine is worth another bet
- How the production empires of Will Smith, Kevin Hart and Ben Affleck are holding up after their blockbuster PE deals
- Why some of Hollywood’s most successful star-backed companies never took private equity money
- Why the smart money is moving from Hollywood stars to digital creators — and who stands to cash in
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Comments
What never made sense to me about these investments is the fact that the studios/financiers own the projects, not the production companies like Sunshine. So, how did Candle expect to build a library without actually financing the movies/series themselves?
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