With Eye on Growth, Imagine Entertainment Seeks an Investment

The New York Times
By Michael J. de la Merced
January 29, 2016


Over three decades, Brian Grazer and Ron Howard have built Imagine Entertainment into a top film and television production company, with credits stretching from the movie ”Apollo 13” to the television show ”Empire.”

Now Imagine is turning to a handful of investors to grow even bigger.

The production company is close to securing an investment of more than $100 million from a consortium led by the Raine Group, the media-focused merchant bank, people briefed on the matter said on Thursday.

Should an agreement be reached — one is expected within days — Imagine would gain new capital and new supporters in a move to expand its ability to back film and television productions. The money and partners could also help Imagine make strategic acquisitions.

Such backing could prove useful as independent production companies look increasingly for outside capital for their projects, with big studios focusing more on blockbuster franchises. One production company, Legendary Entertainment, sold itself to the Dalian Wanda Group, Chinese property and entertainment giant, this month for as much as $3.5 billion.

Final details of the potential investment are still being negotiated, and the talks may still fall apart, one of the people who had been briefed cautioned.

Representatives for Imagine and Raine declined to comment. News of the discussions was reported by Variety.

As part of any deal, Mr. Grazer and Mr. Howard are likely to be joined on a new board by a Raine co-founder, the former Goldman Sachs banker Joseph Ravitch, and others, these people said.

Such a deal would be one of the most notable investments by Raine, which has become known as an adviser to and an investor in some of the most prominent media and telecommunication deals of the last six years.

The firm helped Steve Ballmer buy the Los Angeles Clippers, brokered the sale of a stake in the parent of the Manchester City soccer team to a group of Chinese investors at a $3 billion valuation, and backed Vice Media as it became a multimedia powerhouse.

Raine has also backed DraftKings, the daily fantasy sports start-up that is under scrutiny by state regulators investigating whether the company and its rival FanDuel are operating illegally.

Hollywood has long been part of Raine’s heritage. The firm was born in part through the efforts of Ari Emanuel, the talent agent who is co-chief executive of the talent agency WME/IMG. The merchant bank advised WME on its acquisition of the sports and media talent agency IMG in 2013.

Raine also helped Imax, the theater giant, sell a 20 percent stake in its China business.