Chernin Entertainment eying more production studios

Chernin Entertainment has explored buying other TV and film production companies such as Red Arrow Studios, per The Information and Bloomberg.

Why it's the BFD: Dealmaking is rampant in Hollywood as the rise of streaming increases the demand for content.

The big picture: Several studios have been bought or received new financing over the past year.

• Blackstone-backed Candle Media has acquired Faraway Road Productions, Hello Sunshine, Moonbug Entertainment and a minority stake in Westbrook Inc.
• Apollo Global Management bought a minority stake in Legendary Entertainment.
• Stripes led a $225 million equity investment in A24.

Details: Chernin reportedly hired Centerview Partners and Moelis & Company last year to explore options, which included selling a minority stake to Carlyle.

• But Chernin has since focused on buying a studio. Red Arrow Studios is a network of international production companies. Its work includes the popular reality dating show "Love is Blind" on Netflix.
• Bloomberg reports that Chernin is profitable; had $50 million in earnings before interest, tax, depreciation and amortization; and is seeking a chief financial officer.

Catch up quick: Chernin has produced popular films like "Ford v Ferrari," "Hidden Figures" and the "Planet of the Apes" trilogy and TV series like "New Girl" and "See." It signed a non-exclusive first look film producing deal with Netflix in 2020.

The bottom line: "Because streaming services want to buy out so many of the rights to projects ahead of time, they guarantee a profit for the producer. That makes the earnings more predictable than in the hit-driven movie business of the past." — Lucas Shaw, Bloomberg