First Round: Kourtney and Kim take PE

Having once had the misfortune to see reality TV show ‘Keeping up with the Kardashians’, First Round finds it difficult to believe that Kim, Kourtney and Khloe add much value to anything, much less a private equity portfolio.

However, Thomas H. Lee Partners and Bain Capital clearly beg to differ. The two firms have just committed a combined $300 million to Ryan Seacrest Media, the popular TV producer and American Idol host’s (modestly named) production company – which is the group repsonsible for inflicting such wholesome fare as “Keeping Up with the Kardashians”, “Kourtney and Kim Take New York”, “Khloe and Lamar” and “Kourtney and Khole take Miami” on the unsuspecting world.

Seacrest, whom Clear Channel chief executive Bob Pittman has called an “unmatched creative talent”, has scored big in recent years with his investment in Kim Kardashian and her family’s televisual endeavours. Or as First Round prefers to call them: ‘signposts of imminent cultural desolation’. Or perhaps: ‘live-action Faustian bargains’. 

That said, while the cultural, social or artistic merit of Seacrest’s shows may be questionable, their financial value is clearly not: “Keeping Up with the Kardashians” and its spin-offs are among the E! Network’s highest-rated shows, and have (remarkably) been sold around the world.

What’s more, Seacrest’s eye for a reality TV hit isn’t merely confined to the Kardashians. Oh no. New shows on the Seacrest roster apparently include “Melissa and Tye: A New Reality” and “Shahs of Sunset”, synopses of which First Round was too depressed to even bother looking up. 

Indeed, if there is one area of concern about THL’s and Bain’s investment thesis here, it’s that Seacrest’s  productions are not exactly based around talent that comes with a long-term guarantee; if the two private equity firms’ returns hinge on Kim Kardashian’s ability to stretch her schtick out for another decade, their LPs would be forgiven for being less than optimistic. Although if nothing else, at least this partnership might last a bit longer than her recent marriage.