Private Equity: Barbarians at the Hollywood Gates
Showbiz is shedding content — and war chests to spend on sports, library and, yes, even linear TV are ready
Claire Atkinson is a contributing editor to The Ankler. She is currently also host of her own The Media Mix podcast, and founder of the newsletter of the same name.
Already, the mild-mannered staff at stalwart book publisher Simon & Schuster on New York’s Avenue of the Americas are quaking at the imminent arrival of their new owners, private equity giant KKR. On Tuesday, August 8, it was announced that Paramount Global had offloaded the 99-year-old publisher for $1.6 billion. The legendary firm, once a symbol of Gordon Gekko-style ‘80s excess and corporate raiding, today employs a more traditional P.E. playbook with its $519 billion of assets under management: growth investments, often in distressed properties that require capital to grow — and deep cuts to increase value. With the ultimate goal to parlay a business into a higher sale price to another player — ie., the exit — some KKR gambles have won big (AppLovin); others have gone bust (ToysRUs); while others are yet to prove out (Axel Springer).
For those keeping score, private equity has been behind such headline-making deals as the rebranding of Clear Channel into iHeart, the leveraged buyout of RJR Nabisco, and the IPO of Hilton. And in the last decade, it also has found a new vein of gold: Hollywood. As the Streaming Wars accelerated, and the rate of production to meet Peak TV’s demands multiplied, P.E. began to help finance the growth. Apollo bought into TV and film producer Legendary Entertainment; Providence Equity backed Peter Chernin’s The North Road, and KKR and RedBird Capital poured cash into David Ellison’s Skydance Media.
And now… as the Streaming Wars go bust, P.E. is waiting on the other side too. Among players with the biggest war chests right now:
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