Hollywood is churning again.
Private equity now believes that there is (sky high) value in content creation, which is, some believe, like parimutuel betting at the horse track.
Where the library is thin, the gamble is that the company you are buying can continue to turn out quality programming and that the movie or basketball star will continue to shine for years to come.
Hence, the reported $900 million valuation for Reese Witherspoon’s media business, Hello Sunshine.
A new media arm of Blackstone private equity, to be run by two former Disney executives, has decided that this would be their first investment.
The play is that good content will be sellable to the new mammoth streaming silos that now produce their own content.
And the silo building is only getting bigger as more media companies decide to vertically integrate.
Perhaps these independent content companies will find outlets for their product on these streamers.
Maybe they will become the new pipeline for movie theater owners who now find themselves competing against home viewing.
Will the bet turn out to be American Pharoah or the nag that gets sent to the glue factory?
Source: https://jeffkoeppel.wordpress.com/2021/08/03/private-equity-bets-on-hollywood/
