2024 was a rough year for celebrity production companies in Hollywood and their private-equity backers

• Some celebrity-led production companies struggled in 2024 as Hollywood cut spending.
• Investments by firms like Blackstone and RedBird were hampered by market shifts.
• Despite headwinds, companies like LuckyChap could thrive by diversifying beyond their famous founders.

2024 was a bad year for the TV and film business — and was particularly hard for a set of celebrity-backed production companies that previously raised large amounts of capital at eye-popping valuations.

Private equity firms like Blackstone and RedBird Capital Partners poured a lot of money into celebrity-led production companies, making notable deals in 2021 to back roll-up Candle Media and LeBron James' SpringHill, respectively. The bet was that their star power would give them a head start in a crowded market and that streamers' appetite for filmed entertainment would continue to rise.

The investment boom drove a celebrity production company bubble, said Paul Hardart, who directs the entertainment, media, and technology program at NYU's Stern business school.

"The prices they were garnering were probably bigger than the market could hold," he said. "The Candle thesis was, we'll buy all this content, we'll roll them up and sell them to the streamers. But the scale they put into it wasn't justified."

The cracks in the investment thesis started to show when streamers pulled back on spending, and production was hampered by the 2023 labor strikes.

Reese Witherspoon's Hello Sunshine fell far short of its profit expectations in 2023, leading parent Candle Media co-CEO Kevin Mayer to admit they "paid at the top of the market." Candle Media — which restructured its businesses in 2024 to cut costs — had invested $500 million in the company as part of a Blackstone-backed roll-up strategy.

2024 was grim for many in Hollywood, with new TV series orders down 42% from their peak in mid-2022, per Ampere Analysis. The year brought more damage to some celebrity-backed outfits. These companies don't have big content libraries and usually depend on streamers' fees. That has meant they've acutely felt the pain when streamers started ordering fewer shows.

Will and Jada Pinkett Smith's Westbrook Inc. laid off staff in early 2024 and restructured after struggling to get major deals following The Slap episode of 2022, Semafor reported.

James' company, SpringHill, in late 2024 agreed to merge with Fulwell 73, the British TV, film, and music production company behind shows including "The Kardashians" and "Carpool Karaoke," after losing $45 million from 2022 to 2023, Bloomberg reported. SpringHill had been one biggest fundraisers in the athlete-entertainer space and was valued at $725 million in 2021 after a funding round led by RedBird. The combined company didn't release a new valuation.

One media investor said at least one celebrity-led company struggled to raise funds this past year because its reliance on a famous face gave potential backers cold feet. This person asked for anonymity to protect business relationships; their identity is known to Business Insider.

Which companies will survive and why

Some industry insiders say the celebrity production companies with staying power will be the ones that move beyond their famous backers. Celebrity founders can't star in everything, after all.

Kevin Hart's Hartbeat has expanded beyond projects starring Hart with its development slate. The company also had someone take over as CEO from Hart, who was leading it after its last chief exec left.

Dwayne Johnson's company, Seven Bucks Productions, is looking beyond Johnson's persona for success and making a doc about the comedian Andy Kaufman.

One favorite around town is Margot Robbie's LuckyChap, which has raised no money and just got a big film deal with Warner Bros. after its success with the Robbie-starring "Barbie." But it's produced other hits that don't feature her at all, like "Saltburn" and "My Old Ass," which stars Aubrey Plaza.

Another is Brownstone Productions, the company founded by Elizabeth Banks and Max Handelman, which is behind recent hits "Cocaine Bear" and "Bottoms."

"The key is to develop things they don't have to be in," said a second investor, who also asked for anonymity to protect business relationships. "You can only be in so many things."