SpringHill Co., an entertainment company co-founded by National Basketball Association star LeBron James, is selling a minority stake to a consortium of investors that values the company at $725 million, the companies announced Thursday.
The size of the stake sold to investors could not be known.
The investor group includes Nike Inc.,
NKE -0.80%
The creator of “Fortnite” Epic Games Inc., RedBird Capital Partners and Fenway Sports Group, the parent company of sports teams including the Boston Red Sox and Liverpool FC, an English Premier League soccer team.
SpringHill chief executive Maverick Carter and SpringHill chairman Mr. James will remain major shareholders with supermajority voting shares, according to a person familiar with the matter.
SpringHill, known for its TV shows and movies including HBO’s interview series “The Shop” and “Space Jam: A New Legacy,” will use the funding to launch new shows, explore licensing for its programming in new countries and creating content for Epic Games, among other endeavors, Carter said in an interview.
A portion of the proceeds from the sale of the stake will be used to fund acquisitions, Carter said. “We’re interested in looking at companies that focus on creativity and have creativity at their core,” he said.
SpringHill is expected to generate more than $100 million in revenue over the next four quarters, the person said. SpringHill has broken even and projects revenue of between $150 million and $200 million in 2022, said a person familiar with its financial projections.
As part of the deal, SpringHill plans to produce programming with Nike featuring athletes associated with the sportswear company, Carter said. Nike has a long-standing relationship with Mr James, having entered into a lifetime sponsorship deal with the NBA superstar in 2015.
Epic Games, which beyond “Fortnite” also created “Unreal Tournament”, will work with SpringHill to create programming associated with its products and companies. The companies have worked together before, with Mr James teaming up with Epic in July to use his likeness in its “Fortnite” game.
MM. James and Carter own shares in Fenway Sports Group, and SpringHill has struck a deal to produce content for the company.
Co-founded in 2008 by MM. James and Carter, Los Angeles-based SpringHill has 142 employees who produce TV shows and movies and do commercials for brands like Procter & Gamble Co. and PepsiCo Inc. It has an athlete-focused division called Uninterrupted which produces TV shows and podcasts and sells merchandise.
The deal was completed over a 15-month period during which Paul Wachter, long-time business adviser to Messrs. James and Carter, traveled the United States conducting negotiations with potential investors. A pivotal moment came in June, when Messrs. Wachter and Carter gave a presentation in a suite overlooking the Fenway Park field to a group that included Boston Red Sox owner John Henry.
“When you walk out of a meeting like that, you feel like, ‘OK, it’s done,'” Mr Wachter said.
RedBird CEO Gerry Cardinale said in an interview that SpringHill has the potential to become a multi-billion dollar company over the next five years, with growth opportunities in producing branded content for advertisers. , scripted and unscripted TV shows and movies, and commercial licensing agreements.
“Whether you take it public, monetize it in a different way, or keep it and recapitalize it, this company is at this point where it’s going to take off now,” Cardinale said.
Write to Benjamin Mullin at Benjamin.Mullin@wsj.com
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