Media C-Suite Week No. 23/2024, Issue No. 46

Inside the Media C-Suite, Issue No. 46

Inside the Media C-Suite

It’s Thursday, the 6th of June, 2024.

The end of Q2 is rapidly approaching as we look toward Summer 2024. Traditionally, larger professional investors begin to scale down their deal flow pursuits and concentrate on scheduling the closing of transactions in process before the end of the year.

For the largest investors, this may be the period of reports to CFOs in support of next year’s capital allocations and the formulation of argument in favour of increasing private equity into the Media & Entertainment industry.

For some of these, the Media & Entertainment industry is all they have been thinking about lately. Several fund managers have now closed new fund vehicles with many Limited Partners expecting big things from investment into this sector.

Of special note is the attention on sports as an attractive investment proposition at a time when the Media Majors are winding down their super-hero franchises and in need of new, exciting content to peddle. 

For a great description of “sport” PE, who’s involved and why, take a look at this article in Mergers & Acquisitions.

Also see: 

Technology continues to drive much of the value creation in our industry. For professional sports teams and film producers alike, technology is heightening the risk of poor leadership, unmotivated management and lack of strategic vision as never before. For investors, that means opportunity for lowering valuations and fixing problems.

For media entrepreneurs, this transition to tech-enabled business models offers something far more valuable. The opportunity to distract, disrupt and displace the legacy Media Majors. Never before has there been a better commercial environment to carve out new ways to access consumer audiences and deliver entertainment content to them.

Let’s Get Started

To fully understand what Professional Investors think of the Media & Entertainment industry, and what they want from it, we thought it best to just ask them directly.

The 2024 Media Investor Survey

Our team at the Media C-Suite is wrapping up a survey of Professional Investors who are active in the Media & Entertainment space. 

We define “Professional Investors” as individuals or firms who generate their revenues from financial returns on invested capital. 

Conducting this survey has been a fascinating experience. We interviewed 42 executives who either sat on investment committees or held investment discretion on deals of US$500k or more. Each represented a different investment group. Over half of these were private family offices. Just over a quarter were private funds and 4 were “State-owned investment companies”. 

Our target sample size was 30, so the team really did a great job on outreach. 

We still have several more to process before articulating our findings. However, one important theme stands out so far. 

See: 

Quality Over Quantity

Professional Investors see no shortage of dealflow across several categories of M&E opportunities. 

However, over 80% of those surveyed feel that there is a steady decline in “investor-ready” projects. This increases the investors’ costs as they spend more time on deals that haven’t been thought out well or are poorly presented. 

The flip-side of this is that entrepreneurs who spend the time to build out their propositions, business plans and management teams are standing out among the many poorly presented investment opportunities out there. 

Our Take

A secondary theme emerging from the raw survey data is a distinct bias against single, stand-alone film projects among Professional Investors. 

A little over half say they will not even look at one. 

Of those that will, only a few say they regularly consider equity in a stand-alone film project. Most are willing to look at collateralised debt opportunities but only against stringent criterial that they also report finding few proposals meet.

However, we have anecdotal evidence that smaller, personal investors (including the execs working for Professional Investors) are beginning to embrace the “Executive Producer” role in a more professional capacity. 

This may justify another survey of those investors for the information of Indie film-makers. 

For this present survey of Professional Investors, content production remains of active interest. But they strongly prefer to look at “production companies” with experienced film-making teams that can develop and produce repeatedly. 

We published an article on this last year that you might find interesting. 

See: 

The executive slogan for this issue is: Be Investor Ready!

Just Catching Up?

We’ll help you get up to speed.

Media is the New Tech

Professional Investors are rapidly shifting focus from pure, Silicon Valley-type companies to tech-enabled media companies emerging globally.

Media may be the new tech. But we have a long way to go in the courtship between media entrepreneurs and Professional Investors. 

This is why we started the Media C-Suite. To help shorten that journey. 

After more than 30 years in the private equity game, we have learned a few things about what investors want; and what they don’t. Nothing frustrates Professional Investors more than lack of preparation. 

Professional Investors don’t invest in ideas. It doesn’t matter if making money is possible. What matters is whether or not it is probable. 

Professional Investors don’t invest in hope; they invest in strategy with a high probability of success. They invest in management teams that can implement that strategy. 

Professional Investors invest in plans, information, knowledge, tenacity and alignment of interests. 

Tech entrepreneurs learned long ago that Professional Investors want well-thought-out details. 

No serious tech entrepreneur today would expect a serious investor to inject time and capital without at least a full business plan that clearly describes what the company owns, what it does, who its management team is and how they will convert consumers into revenues. 

Oh, and how much it will cost to achieve how much in revenues over how much time. 

Should media entrepreneurs be expected to do anything less?  

What It Means

Knowledge is the Media & Entertainment industry’s stock in trade. 

So why do so many investment proposals from media entrepreneurs begin and end with only a pitch deck?

Why do so many media entrepreneurs expect to “make it up as they go” when, or if, an investor agrees to a call or a meeting?

Professional Investors want to participate in the Media & Entertainment industry. It is highly lucrative, completely unbalanced and ripe for disruption. There is a lot of smart money out there looking for smart deals in M&E. 

This lack of understanding between media entrepreneurs and Professional Investors is holding everyone back. 

Again, this is why we started the Media C-Suite.

How can we do more to bridge this gap between Professional Investors and media entrepreneurs?

We want to hear from you, Professional Investor and media entrepreneur alike, as you engage each other and seek to parlay an alignment of interests into a capital partnership.

Looking Forward?      

Preparation is the Key.

Here are a few articles to get you moving in the right direction.

Inside the Media C-Suite, Issue No. 46

4 Comments

  1. Hmn. The projects that cross my desk may need some work to make them viable businesses, but that is what capital partners are for. The Creatives are great at creating. The Thinkers are great at thinking. Turning what they do into revenues and equity value is what angel investors and venture capitalists are great at doing.

    If an investor want to wait and wait until the perfect target comes around that needs no help other than money, then they will wait a very long time. That’s what the stock market is for.

    I don’t know any professional investors who will not do the work to acquire a piece of a great business idea before it takes off in value.

  2. A survey of what investors want from media and entertainment deals is long overdue. There are far too many fantasy pitch decks floating around and wasting a lot of time.

    The “Community” section on this site might be a great way for us to turn that around and cultivate the deal flow we all really need.

  3. Great summary of what professional investors are looking for. Too many producers focus on their ‘passion’ projects and the story that must be told when looking for investment. They have to have a strategy for an ongoing business model and focus on what the investors needs and the probability that this project will generate a genuine return for investors. over and over again. Thanks Media C Suite for spelling it all out again

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