The sports and media space has seen increased investment from venture capital firms in the past few years, including with Apollo Global Management buying Yahoo and AOL (although maybe not for long) and Tegna (along with Standard General, which also is the largest shareholder in Bally’s), with Guggenheim Partners buying the Dodgers, with Blackstone buying a stake in YES, with Great Hill Partners buying Gizmodo Media Group, with the Pac-12 mulling and then going away from a private equity sale of a stake in the conference, and with a whole slate of special purpose acquisition companies (SPACs) with sports targets. The latest interesting equity move with at least somewhat of a sports connection is Boston-based private equity firm Abry Partners paying $100 million for what’s reportedly a 15 percent stake in HartBeat, a new company formed of the merger of Kevin Hart’s HartBeat Productions and Laugh Out Loud Productions (a digital films-focused company Hart launched in partnership with Lionsgate in 2016). Here’s more on that from Benjamin Mullin at The New York Times:
On Tuesday, Mr. Hart’s media company, HartBeat, said it had raised $100 million from Abry Partners, a private equity firm in Boston. Abry is buying a 15 percent stake in HartBeat, people with knowledge of the deal said, valuing the company at more than $650 million.
…Mr. Hart predicted that competition among streaming services would result in a market with several bigger players vying for subscribers, each offering distinct content. He drew a comparison to the athletic apparel industry, where established companies like Nike continue to grow. As long as HartBeat delivers good shows, it will endure, he said.
“There won’t ever be a time when people won’t want to laugh, won’t need to drop their shoulders and just have a good time,” Mr. Hart said.
The sports angle to this is that Hart’s done quite a bit in the sports space with both these companies. With Laugh Out Loud, he’s done five seasons (so far) of the Cold As Balls interview show with athletes (Jeff Clanagan, Hart’s long-time business partner and now the chief distribution officer of the new company, spoke to AA on Cold As Balls in 2020). And with HartBeat Productions, he did Olympic Highlights With Kevin Hart And Snoop Dogg for Peacock last summer, featuring the two of them recapping Olympic moments and interviewing athletes. (It’s notable that Peacock parent NBCUniversal had a stake in HartBeat Productions, and will keep a stake in this new company.)
Hart’s also dove into sports in some other ways, including showing up on the ManningCast and at the Eagles’ Super Bowl win, plus doing an Inside The NBA sketch (where he donned stilts to play Shaq) on Saturday Night Live. And he regularly makes the rounds of actual sports shows, including ESPN’s NFL Countdown (his appearance there in Philadelphia last November is seen at top). So there are probably some more sports projects from him coming down the road. And that makes this corporate move worth keeping an eye on on that front.
But this is also notable as part of that general trend of private equity firms investing in content companies. And they’re doing so with a lot of big names; Mullin’s piece also notes private equity firms in companies involving Reese Witherspoon and Moonbug Entertainment. And the idea of investing in third-party content companies that make shows for networks rather than those networks themselves has been seen before in sports, too; for example, during their pursuit of the former Fox RSNs (which eventually went to Sinclair), Apollo Global was reportedly trying to line up a deal with LeBron James’ Uninterrupted for non-game content for those networks. In an era of streaming wars, many are seeing upside in content companies that can sell to multiple platforms and networks. And Abry looks like the latest there.