What are SPACs and how are they affecting the entertainment industry?
, has found new popularity over the past couple of years. Besides being a welcome source of funding, these blank-check investment vehicles look to energize the lightly populated middle of the corporate ecosystem in the media, entertainment, sports and digital sectors.
The advantage for said private business: avoiding the regulatory hurdles and financial scrutiny that accompany traditional IPOs. Entertainment companies are ideal merger targets because they are at the epicenter of today’s celebrity-obsessed culture, says Hal Vogel, veteran media analyst and CEO of Vogel“If you are creating a SPAC, you are looking for a business that has traction and publicity,” Vogel says. “Fashion, sports, music and film have recognition, brand equity and normally some kind of revenue whether from a piece of music or celebrity-branded sneakers.
Harry Sloan, the Hollywood executive who co-founded seven SPACs, including the DraftKings merger partner, counted 40 SPACs at the time of the DraftKings merger that swelled to an overheated 600, in an interview with“I do anticipate a lot more sanity and less speculation among SPAC investors and therefore” fewer such entities in the future, Sloan said.
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