Good morning, everyone. Fortune reporter Paolo Confino here, in for Diane Brady.
Over the last decade, tech has disrupted Hollywood the same way it has other industries, as streaming ravaged the cable bundle, movie theaters, and network TV. Now, the advent of artificial intelligence looms as the next big crisis.
One long-time sports and media investor, Gerry Cardinale, has a simple answer to the complex question of how to thrive: Invest in the best intellectual property. Creative output—whether it’s the Marvel Cinematic universe, an adored Italian soccer team, or the oeuvre of a beloved children’s book author—creates fandoms that can withstand shifts in the “pipes” of distribution, he argues.
“If you have the right intellectual property, you can absorb the transitional changes from one distribution model to another,” Cardinale, the founder and CEO of the investment firm RedBird Capital Partners, told me for a feature on his approach to IP investing.
It’s a thesis Cardinale honed over 20 years at Goldman Sachs and in conversations with one of the world’s most prominent practitioners of that approach: Bob Iger, CEO of Disney, and the architect of the strategy that created the $30 billion Marvel Cinematic Universe. The two men met for breakfast in 2021, and bonded over their shared belief in the enduring value of premium content. “We hit it off right away,” Iger told me. (They became close enough that when Iger was between his CEO stints at Disney, he worked out of RedBird’s offices, and unofficially advised the private equity firm.)
Now, Cardinale is a main character in one of Hollywood’s most-watched business dramas: The bidding war over the future of Paramount Global. Along with KKR, RedBird is backing the bid of its portfolio company, the movie studio Skydance Media, to buy chairwoman Shari Redstone’s controlling shares in the company her family built. (A rival $26 billion offer from the private equity giant Apollo and Sony would buy Paramount outright.)
If Skydance’s merger with Paramount goes through—which appears likely—it would make RedBird a part owner of one of the most storied studios in Hollywood, and arguably would make Cardinale a peer and rival to his friend Iger.
Paramount boasts a treasure trove of intellectual property—The Godfather, Titanic, The Twilight Zone—and owns a sprawling distribution system including cable channels like Nickelodeon and MTV, the CBS network, and the Paramount+ streaming service. What Skydance and RedBird would do with all those means of distribution remains to be seen. (RedBird declined to comment on the deal.)
But there are some clues to glean from Cardinale’s approach at RedBird. There, he has expanded the definition of intellectual property: RedBird’s portfolio includes the Italian soccer team AC Milan; an investment in the holding company that owns the Boston Red Sox; and a company built around the work of children’s book author Mo Willems. “We’re an IP monetization engine,” Cardinale says. “That’s what we do.”
Paramount’s precious IP, if it ends up in Skydance and RedBird’s hands, could end up being the ultimate test of this thesis.
To read the full article about RedBird and Cardinale, click here.
Paolo Confino
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