Fifth Season, the Hollywood studio behind the Apple TV+ series Severance and the football comedy 80 for Brady, is looking to raise about $300 million to increase its output of TV shows and movies.
(Bloomberg) — Fifth Season, the Hollywood studio behind the Apple TV+ series Severance and the football comedy 80 for Brady, is looking to raise about $300 million to increase its output of TV shows and movies.
The company, formerly known as Endeavor Content, was sold last year to South Korean entertainment company CJ ENM Co. Fifth Season has hired financial advisers and is in the early stages of meeting with potential investors, according to people familiar with the matter. It could issue debt or sell a stake in the business, said the people, who asked not to be identified because the talks are preliminary and might not result in a deal.
“We are considering various options to strengthen the financial stability of Fifth Season but nothing has been decided,” CJ ENM said in a statement to Bloomberg.
Fifth Season plans to double its output of scripted series, fund more movies like last year’s action thriller Ambulance and build out its reality TV business. It also aims to add to a portfolio of investments that includes stakes in smaller firms. CJ ENM plans to remain in control, the people said. Endeavor Group Holdings Inc., Fifth Season’s former parent, retained a 20% stake in the business and isn’t looking to sell.
CJ ENM, controlled by the food and pharmaceutical conglomerate CJ Group, bought Fifth Season to expand into the US and Europe.
Under the leadership of Graham Taylor and Chris Rice, Fifth Season has distributed TV series such as The Night Manager and Killing Eve – two early success stories – and produced movies like Cha Cha Real Smooth. The company plans to spend $1 billion on production in the next 12 months.
CJ ENM is one of South Korea’s largest TV producers but is small compared to the largest US studios. The company’s current market capitalization is about $1.2 billion, and it recently disappointed investors with a larger-than-expected first-quarter loss, stemming from Fifth Season and the company’s streaming TV service.
This isn’t the best time to raise money for film and TV production. Major media companies are cutting costs to reduce losses in their streaming services. The market for Hollywood production companies, red hot a couple years ago, has cooled off.
But some independent outfits, management companies and financiers see opportunity in this retrenchment. Skydance Media LLC, one of the producers of Top Gun: Maverick, raised $400 million last October, while former Fox chief Peter Chernin raised money from Qatar this year to fund programming and potential acquisitions.
Fifth Season grew out of the film financing and media rights groups at Endeavor, the talent agency turned media conglomerate led by Ari Emanuel. He wanted to take advantage of streaming services’ growing demand for new programs, creating a studio that could earn more than just fees for representing clients.
Endeavor was forced to sell the business after a dispute with the Writers Guild of America, which mandated that talent agencies could own no more than 20% of an affiliated production company.
In the current climate, independent producers like Fifth Season may be able to get better terms for their films and TV shows. Major players in streaming, like Netflix Inc., are no longer demanding unending rights to the shows they offer. That opens to the door for independent companies to resell their films and series to other networks and services once they’ve completed an initial run.
“Content spending will continue to grow, it’s grown every single year of my lifetime,” Chernin said earlier this year. “As those big platforms get bigger and bigger, there will be greater need for experienced, trustworthy, well-financed independents.”
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