Content Partners, the investment firm that forged a new financial option for Hollywood profit participants, is celebrating its 15th anniversary this year, just as the industry is seems poised to head into a period of retrenchment on the kind of deals that built the company.
Headed by former William Morris Agency CFO Steve Kram and former Brillstein-Grey Entertainment CFO Steven Blume, Content Partners was formed in 2006 with the goal of giving Hollywood insiders an easier way to liquidate profit participation stakes in movies and TV shows. Content Partners has bought out the backend points held by dozens of corporations and individuals, assembling a portfolio of stakes that the company manages as an investment property.
Mark Cuban and Todd Wagner were the original investors in Content Partners; Wagner remains an equity partner. The company started out with modest ambitions to target individuals with a handful of points or stakes in movies, TV shows, theatrical productions, books and other intellectual property. But more recently Content Partners has been doing transactions with financial investors who were involved in studio slate financing deals.
Content Partners has thrived as an innovative option for the creative community, but the movement across the TV industry to emphasize higher upfront payments rather than granting back-end equity stakes to creatives could put a crimp in the company’s long-term pipeline of points.
Disney, for one, has circulated a plan in the creative community to change the paradigm of how profit participation is defined and how quickly it is paid out. The major studios would like to move away from granting small profit participation stakes that run in perpetuity because those deals leave the production entity with a fiduciary duty to participants that requires a high level of accounting and auditing. Within the creative community, there’s growing concern about the industry moving away from a system where top-tier writers, actors and directors can expect to receive a slice of the profits derived from their work.
For now, Kram, who is CEO of Content Partners, and Blume, who is CFO and chief operations officer, are not worried.
“Our business is as busy as ever,” Kram says. “I think there will always be room for participants on the film side. Television is changing. I think that will last for a little while but in the long run I don’t think that’s really a model.”
Kram noted that Content Partners has become a source of production financing for some independent companies.
“When their source of financing dried up, they’ll sell us their whole library,” Kram said. “Nobody else knows what they’ve done but they use that money to make their next five to 10 projects.”
Over the years, Content Partners has done a handful of sizable transactions. It acquired a 50% interest in CBS’ “CSI” franchise, which went on the block when original co-production partner Alliance Atlantis was taken over by Goldman Sachs. Kram and Blume also acquired the rights to the film library of Joe Roth’s Revolution Studios in 2017 after that venture came to an end.
“There are a lot of structural reasons as to why somebody will sell to us,” Blume said. “It’s a lifestyle decision for a lot of people.”
Content Partners has grown to encompass six financial professionals, including Kram and Blume, who manage a library that stands today at about 400 films and nearly 3,000 hours of television. Most of its transactions have come from industry word of mouth and the company’s relationships with business managers and lawyers all over town. Kram and Blum toasted the 15th anniversary milestone with a gathering on Sept. 26 that drew about 75 attendees to the Dreamscape virtual reality experience center in Century City.
“I thought it would be amazing if we could do $100 million worth of business,” Kram said. “Now we’ve done dozens and dozens of deals worth well over $1 billion.”
(Pictured: Content Partners’ Steve Kram and Steve Blume, center, flanked by Ziffren Brittenham’s Ken Ziffren and Cliff Gilbert-Lurie)