Content is king. Thats the new mantra being heard from PE investors targeting the media space. GTCR Golder Rauner is the latest firm to jump on the content bandwagon, launching Boomerang Media LLC, which will acquire and manage entertainment copyrights and related intellectual property across all media.
The Chicago firm is backing the initiative with an initial $200 million equity investment. The firm tapped Eric Ellenbogen and John Engelman to spearhead the platform as co-CEOs.
The pair comes from Classic Media, which was launched in 2000, and subsequently sold to Spectrum Equity Investors and then Entertainment Rights Plc for $210 million early last year. Through Classic, Ellenbogen and Engelman corralled a number of familiar titles, such as Casper the Friendly Ghost, Dick Tracy, He-Man, Lassie and Ghostbusters, among others. Both Ellenbogen and Engelman also served as co-CEOs of Broadway Video Entertainment, and Ellenbogen put in a stint as the president and CEO of Marvel Entertainment.
Its likely that the focus for Boomerang will mimic that of Classic to some degree, as content, even for mature titles, is finding new channels through which to reach consumers. Part of this premise rests in the ongoing advancement of new technology, making it easier for consumers to access older titles. But content is also viewed favorably by the private equity crowd thanks to its stable cash flows, which are derived from distribution deals, home video sales, and even ancillary revenue streams, like toy sales.
The management and exploitation of intellectual property rights for iconic entertainment franchises is a unique space in which we continue to see a number of intriguing investment opportunities, GTCR vice president Eric Sondag said in a statement.
Other investors have been actively targeting the industry as well. Apax Partners, for instance, acquired Hit Entertainment back in 2005, which controls such titles as Bob the Builder and Barney. And other media, such as music, has also proven popular. Lehman Brothers Merchant Banking launched music catalog Evergreen Copyright Acquisitions almost two years ago, while Tailwind Capital Partners backed the merger between Concord Records and Fantasy Inc.
For GTCR, the investment represents its second major initiative in January, as the launch came just days after the firm unveiled its new consumer product rollup, Aspire Brands. For the Aspire platform, GTCR has committed $250 million.