Erik Hodge is the Los Angeles branch of The Raine Group. He believes Hollywood is a bit too risky at the moment.
“Bob Iger said this — and it’s always a good idea to say what he says — there’s a lot of anxiety,” Hodge said on Wednesday’s TheGrill panel “Merger Mania: Behind the Mega Deals in Media & Entertainment. And that’s just a fact, we (are in) a global situation that’s unsettling. The stock market is down; media companies are down 40% and more.”
However, Hodge — as well as others featured on the panel moderated by Creative Media Chairman Peter Csathy — said Hollywood is in a period of transition, not a free falI, and that includes mergers and acquisitions.
“You have a company like Netflix, which was kind of leading the charge, that now has to transition from a single revenue stream business to a [multiple stream] business,”Hodge said. “And then you have the other media companies working on their streaming. So there’s a lot of transition, but I think there’s an unbelievable amount of opportunity … you have a moment where audiences are more connected to content creators and advertisers than they ever had been.”
A recent boom in M&A activity saw Hollywood saw AT&T sell WarnerMedia in a deal with Discovery; Amazon acquire MGM; and major talent agency CAA gobble ICM Partners to become one entity. Panelist Carlos Jimenez, managing director of Moelis & Company investment bankers, said he is seeing some clients hesitating to jump into new M&A deals in light of a struggling economy, as well as Hollywood’s own slowdown in the streaming boom as evidenced by Netflix’ recent loss of subscribers.
Jimenez, however, suggests that now is the right time to seize this opportunity, just like Hodge. He said his company’s job is not to sit on the sidelines for six months waiting for economic change but to “really to find where the opportunities are is where there is disruption is creating an opportunity. So it’s finding those talented managers, the solid business plans that are giving capital looking to this period of time versus sit back and watch what their peers are doing.”
Below are some examples.
Hodge was joined by Jimenez and Andrew Howard from Shamrock Capital. Emily Wang, managing director of LionTree, also participated in the panel. Wang, who is a specialist in gaming, said that she sees a trend towards larger game developers buying smaller companies.
Howard agreed with Howard that content is crucial and said that his company is aggressively seeking premium content across all platforms. “The A-plus talents are getting their story out there,”He said.
For over a decade, WrapPRO’s Grill event series has led the conversation on the convergence between entertainment, media and technology, bringing together newsmakers to debate the challenges and opportunities facing content in the digital age. Tailored to a C-suite and innovative, forward thinking attendees, the event delivers a unique series of curated discussions, industry panels and virtual networking activations that explore the ever-changing media landscape. Visit TheGrill for more informationthegrill.thewrap.com
TheGrill 2022 sponsors include Loeb & Loeb, City National Bank, Gracenote, Warner Bros. Discovery, Gerber Kawasaki. Sony Pictures. Take-Two Interactive. SAG-AFTRA. New York Festivals. Samba TV. IMAX.