Media Execs Continue to Drive Private Equity Investors into Media & Entertainment

Jeff Zucker leading the charge to run PE firms investing in M&E. Feature Image.

Jeffery Zucker, former CEO of both CNN and NBC/Universal, to helm new US$1 Billion Joint Venture Investment Firm named RedBird IMI.

RedBird IMI was announced less than a month ago as already being fully capitalised.  The new investment firm is a joint venture between US-based RedBird Capital Partners (Redbird) and UAE-based International Media Investments (IMI).  With a primary office in New York, the private equity vehicle expects to acquire equity stakes in large-scale media, entertainment and sports content “properties” on a global basis.

Mr. Zucker is a heavy-weight Media Exec who exited his role as CEO of CNN under a cloud in February, 2022.  Eleven months later, he is in charge of a US$1 billion war chest.

Mr. Zucker’s move into private equity comes as shareholders in publicly-traded media conglomerates waver in their evaluation of strategies that fail to deal with the continuing “streaming wars” and strong competition within growing markets with appetite for new content. See, Wall Street Punishes U.S. Media as Cord Cutting Accelerates.

Zucker acquired 30 years of leadership experience across these media giants in entertainment, sports and news outlets and was heavily involved in the digital transformation of the media industry.  He was CEO of CNN from 2013 to 2022, leading a transformative turnaround of the global brand now owned by Warner Bros. Discovery.  Overlapping with CNN was Zucker’s role as President of Turner Sports from 2019 to 2022.  Prior to CNN, he spent 25 years at NBC Universal, where he served as CEO from 2007 to 2011, during which time he pushed out the online streaming service Hulu in direct early competition with Netflix and Amazon.

Mr. Zucker’s investment strategy at RedBird IMI is assumed to focus on acquiring a stable of brands, producers and operating companies with strong intellectual property rights able to feed a growing appetite for diverse entertainment and sports content across globally expanding digital distribution platforms, including streamers and FAST operators.  However, his US$1 billion war chest is sufficient to pursue positions in much larger targets, including streaming and FAST platforms themselves.

According to Los Angeles Times’ journalist Stephen Battaglio, Zucker’s position as CEO of such a well-funded and sudden investment JV may “lead to speculation that RedBird IMI could make a bid for CNN if Warner Bros. Discovery decides to spin off the cable news network to help reduce the company’s massive debt.” 

CNN was highly profitable during Zucker’s reign as CEO, reaching profits in excess of US$1 billion between 2013 and 2022.  See the full Los Angeles Times article here.

As the Media C-Suite reported earlier, private equity fund managers are allocating ever increasing sums into the Media & Entertainment industry.  Private equity deal volumes into M&E grew to record heights in 2021.  In the 12 months to the end of June 2022 a record US$469 billion in deal value spread over 1,014 deals were announced.  Read the full article, Entertainment Grows as Private Equity Pours Money into Disruption.

Sovereign Wealth Funds are also take highly strategic stakes in M&E assets as the Media C-Suite reported in Saudi’ New Investment Strategy in Media & Entertainment.

Zucker’s new firm will be investing its own, joint venture capital initially and may open to other investors at a later date.  It was not disclosed how much of the stated US$1 billion was contributed by which joint venture partner in a press release from Redbird Capital Partners on December 13, 2022.

With partners such as RedBird and IMI, Zucker now has the team, transaction expertise, resources and industry knowledge to either shake up the M&E industry’s present-state or pursue a growth strategy designed to push the industry’s digital delivery of content into the next stages of the “streaming wars”, as heavy-weight platforms such as Netflix, Disney+ and Amazon come under pressure to deliver more diversified, high-value content while competing for subscribers. 

Redbird was founded in 2014 by Gerry Cardinale, a 20-year veteran of Goldman Sachs where he served as Partner and helped run its US$100 billion private equity business.  RedBird is billed as an active growth investor across consumer sectors, but with a clear taste for sports and entertainment assets.  RedBird manages over US$7.5 billion in capital from Cardinale’s network of Private Family Offices and global institutional investors. 

gerry cardinale, founder and ceo of redbird capital partners media c-suite
Gerry Cardinale, Founder & CEO of RedBird Capital Partners. Image credit: RedBird Capital Partners.

Redbird holds stakes in a number of entertainment assets, including SkyDance Media and the SpringHill Company (founded by LeBron James & Maverick Carter).                                                                               

RedBird acquired the European football club, AC Milan in August 2022 for €1.2 billion.  This adds AC Milan to RedBird’s ownership of a minority stake in Fenway Sports Group (owners of Liverpool football club and the Boston Red Sox).  They also hold a majority stake in French Ligue 1 club, Toulouse. 

According to an article in Arab News, IMI is a subsidiary of the Abu Dhabi Media Investment Corporation (ADMIC).  Billed as a private company rather than a State-owned investment company, ADMIC is owned by Sheikh Mansour bin Zayed Al-Nahyan, the half-brother of Abu Dhabi’s former ruler, Sheikh Khalifa bin Zayed Al-Nahyan. See the article in Arab News here.

sheikh mansour bin zayed al nahyan media c-suite
Sheikh Mansour bin Zayed Al-Nahyan. Image credit: Mohammed Abdul Hakeem/Arab Media Group.

Sheikh Mansour also owns the Abu Dhabi vehicle that acquired the English Premier League football club, Manchester City in 2008. 

However Mr. Zucker decides to move forward, it is likely that pushing sports content into mainstream entertainment will be a heavy component of RedBird IMI’s longer-term investment strategy.

2 Comments

Leave a Reply

Previous Story

Defining Our Community

Next Story

Confirmed: Justin Bieber Cashes Out