Dr Strange isn’t casting spells for free: Wall Street Titans behind Marvel (and more)
Marvel’s Phase 4 hasn’t been faring as well as previous phases, with Disney CEO, Bob Iger stating he was reconsidering the number of Marvel films to shoot and if so many sequels are necessary. Avengers: Infinity War’ and ‘Endgame’ reportedly cost a total of US$1b to make! If a film wants to break even, it must earn 2.5 to 3 times the production cost.
So who is footing the bills? While Disney, Netflix and Warner Bros. are taking a more cautious approach to content, Private Equity players are investing heavily in entertainment and TMT.
Let’s take a look at a few:
✅ The latest Top Gun film earned more than US$1.4b. Skydance Media is the company behind the film, and they have ties to Silicon Valley tech giant David Ellison, who happens to be the son of Oracle co-founder Larry Ellison.
Skydance is valued at over US$4b! 💰
✅ Artists Equity is a film and TV production company founded by Matt Damon and Ben Affleck. Redbird invested in them, with at least US$100m. Redbird was founded by Gerry Cardinale, a former Goldman Sachs executive in 2014. They have a really strong presence in sports. At the end of August last year, Red Bird Capital acquired AC Milan for about USD1.3b and later sold its 40% stake of OneTeam in a deal that values the 3-year old company at about US$1.9b.
✅ Clarion Capital, based in New York, is a middle-market private equity firm that usually goes for smaller investments in lesser-known companies. They invested in Vin Di Bona, an LA-based TV production company, as well as launched V10 Entertainment.
✅ Qatar Investment Authority is the 9th largest sovereign wealth fund in the world with an AUM of over US$450 billion. Early this year, they put in US$150m into The North Road Company, a film and TV studio which is quite well known in Hollywood.
✅ Shamrock Capital purchased the rights to Taylor Swift’s first six albums for about US$300m. Their parent company is Shamrock Holdings, which was established by late Disney Executive, Roy Disney. BlackRock led an investment of more than USD90m in Macro, with HarbourView Equity Partners and Goldman Sachs also participating in the deal.
Why should students know this?
If you're interested in specialised Investment Banking teams like TMT or targeting to get into PE firms, you must know of key deals and the step-by-step transaction process to ace interviews!
Deals require extensive due diligence, valuation, and financial modeling to drive projections and return on investment. Knowing the LBO model, for example, as well as knowing about a company’s key deals/background and being able to formulate opinions on them is a must for getting through interviews. It is imperative to be able to look at deals such as the ones mentioned above, and form professional opinions on them.
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