Entertainment-focussed private equity and venture capital firms have new competition – and possibly a potential co-investor – in the form of the US’ third-largest bank: JPMorgan has said it will draw from its own balance sheet to invest some $200 million (€136 million) in the struggling entertainment industry.
The bank said its newly formed JPMorgan Entertainment Advisors division will use subordinated debt to back investment opportunities including film and television financings, content acquisitions, and traditional and digital media start-ups.
A bank spokesman said no specifications have been determined as to a target number of investments or deal sizes.
Though JPMorgan identified this as a “new initiative”, it notes that it has a long history of financing films, dating to the silent movies of the 1920s, and recently hired two former heads of Sony Entertainment Pictures, Alan Levine and Ken Lemberger, to lead JPMorgan Entertainment Advisors.
“There are exciting opportunities taking center stage, and with the industry expertise, deep relationships, and deal-making abilities of Alan and Ken, we are well positioned to continue playing a leading role, not only as a financier, but as a trusted advisor and financial partner,” John Miller, vice chairman of West Coast Mid Corporate Banking and manager of the entertainment team, said in a statement.
The bank said it has already made entertainment investments this year, though did not release specific information, save to say it had made “a significant equity investment in Vine Alternative Investments, a newly formed entertainment opportunity fund”.
A number of similar initiatives have launched this year, as the film industry struggles to cope with falling ticket revenues, digital piracy and skyrocketing production costs.
In July, publicly listed alternative assets manager American Capital invested $100 million in the creation of Oceana Media Finance, which provides financing for independent films. Oceana’s product offerings include pre-production bridge loans, mezzanine gap loans, print and advertising financing and, to a lesser extent, equity investments.
In May, Goldman Sachs partnered with film producers Harvey and Joel Weinstein to set up a $285 million Asian Film Fund. They intend the fund to produce and market 31 films over the next six years, projects that may involve martial arts star Jackie Chan and iconic Hong Kong filmmaker Wong Kar Wai.
And, just three months ago, former HBO chairman and chief executive Chris Albrecht and Forstmann Little founder Ted Forstmann said they would raise $250 million fund to target investments in the media and entertainment sectors.