ViacomCBS Inc. has agreed to sell one of its historic Los Angeles movies to Hackman Capital Partners and Square Mile Capital Management for $1.85 billion. The entertainment company seeks to raise cash as demand for production soars and competition for streaming subscribers grows against rivals Walt Disney and Netflix, as per Bloomberg news.
ViacomCBS studio center property is spread over 55 acres and is locally known as CBS Radford. The studio has 22 sound stages where production ranges from the era of silent pictures to Tv classics. They include classics like “Seinfeld” and “Gilligan’s Island” to the present action series “SEAL Team.”
In a statement made by Naveen Chopra, the Chief Financial Officer of ViacomCBS, on Tuesday, he said,” The sale is a part of the ongoing optimization of the company’s operations and real estate portfolio. The capital raised will be redeployed for strategic growth, and that includes the streaming space“.
ViacomCBS stocks fell by 1 % in New York on Tuesday at 9.32 am.
Hackman Capital and financial partner Square Mile Capital have been on a buying spree, having built a real estate portfolio of $6 billion. It includes the real estate of entertainment production studios that a Hollywood studio does not own.
The deal is done recently included acquiring Queens located Kaufman Astoria Studios and another studio development project in Toronto. Hackman is also planning to spend $1 billion in renovating Television City in Los Angeles that it had acquired from CBS in 2019 for $750.
The biggest production center in Los Angeles, Stages are leased in advance because of the endless demand for entertainment from streaming subscribers. According to Film LA, which monitors the production permits in Los Angeles, the number of shooting days in quarter 3 was the highest in 26 years in greater Los Angeles.
PE investors like Bain Capital and Blackstone Inc., are among the Wall Street firms acquiring studio real estate and betting on rising demand for scarce space in entertainment production.
ViacomCBS has been selling off its real estate to finance more Tv serial productions and films for Paramount and its streaming services. Their headquarters in Manhattan, known as Black Rock, was sold for $760 million in august 2021. CBS, however, still owns the famous Paramount Picture Studio located on 62 acres in Los Angeles.
As of September 30, ViacomCBS had 47 million subscribers for its streaming services compared to 214 million and 118 million for Netflix and Disney+ respectively.
As part of the new arrangement, ViacomCBS will continue to occupy the stages and produce content while CBS Broadcasting Inc. will enter a long-term leaseback deal of the broadcast center at its Studio City Cite. The deal is likely to be closed before the end of this year.
