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Film and TV investor Content Partners just announced a new financing arm at a time when some institutional investors are fleeing Hollywood.
It kicked off with a deal providing debt financing to Media Capital Technologies to support its backing of Lionsgate's film slate. Lionsgate spun off its studio earlier this year from the streaming service Starz.
Content Partners Capital (CPC) is targeting up to five deals a year of up to $100 million each in debt financing for film and TV companies. It provided $15 million in the Lionsgate deal, a person familiar with the deal told BI. They requested anonymity to discuss a private deal. All told, CPC believes there's a $2 billion market of entertainment deals under $100 million, of which it aims to capture half.
CPC is led by Alphonse Lordo, former managing director at Truist Securities, where he headed up its entertainment sector. Lordo said Content Partners saw a void to help entertainment companies that are stuck in a financing bind, unable to get bank or private-equity backing.
Others providing similar services are private-credit lender Monroe Capital and Fortress Investment Group, which acquired Vice Media out of bankruptcy.
"You need a special knowledge to win in this space," Lordo said. "A lot of people came in with their pipe and ascot, and they've gotten their clocks cleaned. We think we know how to invest in a market that needs capital and can invest in a very smart way and earn a return. There's a big void to fill."
Some investors may be down on Hollywood for good reason. The era of Peak TV is over: Big entertainment companies have reduced spending as streaming hasn't made up for losses in linear TV. The box office is declining, and social media and free videos on YouTube are grabbing an ever-bigger share of people's attention.
LA-based Content Partners considers itself in a rare position to capitalize, though. It may not be a household name, but its portfolio is full of them. It was started in 2006 with backing from Mark Cuban and entertainment investor Todd Wagner to help Hollywood insiders liquidate profit participation stakes in movies and TV shows. It's acquired $1 billion in IP, owning titles including "13 Going on 30," "Black Hawk Down," and "Black Swan." It also owns Revolution Studios and co-owns the CSI television franchise.
Lordo said Hollywood is going through a volatile time, but Content Partners is confident in its deep sector knowledge and ability to find companies worth investing in.
"We know the value of IP," he said. "We know the majority of the operators. We see the long-term value of IP not going away anytime soon."
