LeBron James' Hollywood ambitions are turning into a big financial alley.
James' entertainment company, SpringHill Co., has secured a private equity investment to fuel the growth of the Los Angeles Lakers star across film, television, video games, consumer products and live events.
SpringHill Co. said Thursday it has made a deal for a group led by New York-based RedBird Capital Partners to acquire a significant minority stake in the company, known for shows including "The Shop" on HBO and the recent Warner Bros. film “Space Jam: A New Legacy”.
Participants in the deal include Boston Red Sox owner Fenway Sports Group, clothing brand Nike and "Fortnite" maker Epic Games. The deal values Los Angeles-based SpringHill at $725 million.
No other financial details of the transaction were disclosed, but people familiar with the terms said the RedBird-led group will own nearly half of the company and provide nine-figure capital to grow the business, with the potential to get more money later. . James, who serves as company president and chief executive officer, Maverick Carter, will continue to own a majority stake.
Carter, a longtime friend of James's from Akron, Ohio, who has managed the star's business for years, said the capital injection will allow SpringHill to produce more of its own content, invest in new intellectual property and acquire other companies, including Production Companies.
“We will be able to fund our own projects,” Carter said over Zoom. "We're going to build out our physical production arm to be able to finance and control the production of the things we make, so when we talk about empowering creators, we can really leave creators in control."
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The company expects to exceed $100 million in revenue over the next 12 months, according to Carter, on the upside. 67% compared to the last 12 months, when SpringHill generated about $60 million in sales.
Last year, Carter and James raised $100 million for SpringHill from investors including Sister, the producer of Elisabeth Murdoch, Stacey Snider and Jane Featherstone, and Guggenheim.
The SpringHill deal is the latest investment by a high-profile production company amid a content gold rush in the entertainment industry. Media companies have been hungry for content to create streaming services with new shows and movies.
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Reese Witherspoon's Hello Sunshine, the entity behind “Big Little Lies,” received a majority investment in August from the firm made up of former Disney executives Kevin Mayer and Tom Staggs and private equity giant Blackstone, valuing the firm in more than 900 million dollars. Amazon is seeking to acquire James Bond producer Metro-Goldwyn-Mayer Studios for $8.45 billion, pending regulatory approval.
“Moonlight” producer A24 and “Dune” studio Legendary Entertainment have been the subject of recent deal speculation.
SpringHill was a perfect fit for RedBird Capital, founded in 2014 by former Goldman Sachs partner Gerry Cardinale, who has known Carter and James for more than a decade.
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RedBird is heavily invested in sports and entertainment, with a portfolio that includes investments in YES Network, the New York Yankees' regional sports network; David Ellison's Skydance Media; and XFL, which he owns with Dany Garcia and Dwayne Johnson. RedBird is also a shareholder in Fenway Sports Group, which in addition to the Red Sox owns Liverpool Football Club and Boston's Fenway Park. James and Carter became partners at Fenway earlier this year.
SpringHill has been entertaining deal negotiations since at least July, when the Information first reported that investors were circling. Fenway was in deal negotiations with SpringHill when he brought Cardinale to the table, Carter said. Cardinale was quick to see the potential to develop the SpringHill business and a deal was finalized in just a couple of months.
“The goal is to create a multi-billion dollar diversified content and culture company, and I think that puts it in a pretty unique position,” said Cardinale, founder and managing partner of RedBird. “It's not just about capital; It's about listening to Maverick and LeBron in terms of what they want to build, where they've taken the company from a permanent start to today, and then saying what the potential trajectory is."
The deal is the latest push for SpringHill, already one of the best-known of a handful of content companies launched by sports stars.
Golden State Warriors' Stephen Curry owns Unanimous Media and Brooklyn Nets' Kevin Durant co-founded media and investment company Thirty5 Ventures. Kobe Bryant's widow, Vanessa Bryant, runs Granity Studios, the production company created by the late Lakers great and Oscar winner.
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The RedBird deal opens the door to expanding SpringHill's roster of movies, shows and documentaries, as well as developing its brand and consumer products business. It builds on an existing relationship with Nike, which signed a $90 million, seven-year endorsement deal with James when he was 18, making him the highest-paid player in the NBA.
Epic will work with SpringHill to create new experiences using the company's brands. James appeared earlier this year in the popular shooter game "Fortnite." SpringHill will also be able to work with Fenway to create original content about their teams and venues.
In addition, the deal raises the possibility of SpringHill working with other companies in the RedBird stable, including XFL and Skydance, known for productions like the Apple TV+ series “Foundation” and the Netflix action movie “The Old Man.” Guard”.
“The way I invest, I'm always looking at that connectivity with the different companies that I have investments with,” Cardinale said. "You should expect us to lean on that across the board."
SpringHill's lineup includes a reboot of the comedy film “House Party” for the HBO Max streaming service. Last year, the company dropped its deal with Warner Bros. for a first-look deal with Comcast Corp.'s Universal Pictures. Universal released the 2015 Amy Schumer comedy “Trainwreck,” in which James played a memorable supporting role.
Carter has big ambitions for SpringHill, seeing its potential as much more than a vehicle for James' off-court career.
“We will be able to finance and build our own intellectual property, it's an aspiration, but in the same way that Disney does,” said Carter. “He is aspirational, he is arrogant. But arrogant aspiration is what gets things built."
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