It’s been a big couple of weeks for TikTok. (Nicole Vas / Los Angeles Times Anjum Naveed / Associated Press) SPACs die if they can’t find an acquisition target that works within two to three years. With the market so crowded with SPACs and fewer companies available to buy, at some point, they will begin to drop. Quibi also explored the idea, though in its case that clearly didn’t work out.
MGM has considered going public through a SPAC. For one thing, there aren’t that many big targets in the media and entertainment space, which is why you’ll probably see more of these vehicles looking at mobile games, esports and fitness apps. Still, the SPAC boom may be limited in Hollywood. Putting together content and hardware has a more complicated track record in entertainment, but it makes sense in the at-home fitness space.Įntertainment connection or not, the SPAC backers clearly see an expanding market for home workouts among folks who don’t want to pay as much as Peloton is charging for its bikes. Combining content with streaming services and a strong brand worked wonders for Disney. Mayer, in his statement announcing the deal, compared the Beachbody roll-up to his work building Disney’s direct-to-consumer business: “I see many parallels at Beachbody with the work we did at Disney, where we aggressively accelerated our digital transformation and leveraged our content to build Disney+, ESPN+ and Hulu.” Separately from their SPAC, Mayer and Staggs are exploring a roll-up of independent media and entertainment companies including Scooter Braun’s Ithaca Holdings and Ben Silverman’s Propagate Content, according to the Hollywood Reporter. “We also see additional opportunities for M&A and growth down the line as they further expand their platforms and reach and we look forward to helping them maximize those opportunities.” “Beachbody is a high-quality digital content and fitness products company poised to benefit from three powerful market trends: digital subscriptions, connected fitness and growing consumer demand for health and wellness,” Staggs said in a statement. Beachbody is arguably entertainment-adjacent because it makes video content, but so do those workplace safety training firms. The business of their former employer isn’t obviously related to Beachbody - known for the P90X workout fad, Shakeology drinks and multilevel marketing - unless you count Disney’s ties to sports through ESPN. Take Mayer and Staggs, the executives who came closest to getting Bob Iger’s CEO job at Disney without actually succeeding him. There’s no guarantee that SPACs sponsored by ex-studio executives will all invest in entertainment, though. Plus, Marvin said, “There’s a little bit of FOMO involved.” “They’re kind of nearing retirement but they’ve built up all this knowledge.” It lets them get in on exciting and potentially lucrative “growth areas” in the tech and media space.
Plus, they got a massive boost of legitimacy through headline-making deals, such as when space travel company Virgin Galactic went public through a SPAC in 2019, raising $480 million.Īdditionally, the banks that run the SPACs like having high-profile executives as sponsors because they can draw attention and establish legitimacy with the investment community.įor lifelong dealmakers like Mayer - known as the architect of Disney+ and key acquisitions of Marvel Entertainment, Pixar, Lucasfilm and Bamtech - the SPAC market has clear appeal. However, if the SPAC’s shareholders don’t like the proposed deal, they can take their money back.īlank-check companies have been around for a long time, but they started to look like good alternatives when the coronavirus crisis dried up an already shaky IPO market as well as private capital. A SPAC can point to the growing digital media space (“Look, the attention economy is booming!”) without having to justify the valuation of a specific studio, short-form streaming app or entertainment business newsletter. Going public through a SPAC appeals to companies that need to raise cash but are iffy about the scrutiny of a normal pre-IPO roadshow. Once a SPAC raises the capital it wants through an IPO, the company looks for something to acquire and thus take public. SPACs are companies whose sole purpose is to raise money on Wall Street to go out and buy real companies. You may occasionally receive promotional content from the Los Angeles Times.
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