Private Equity Panel Talks Digital Media
Apollo Global senior partner Aaron Stone predicts that his firm's CKX, owner of the "American Idol" franchise, has digital opportunities, in which it will invest.
NEW YORK - A panel of private equity executives with media and cable investments drew a crowd here Monday on the opening day of the annual UBS Global Media and Communications Conference.
Moderator Sam Powers, managing director at UBS, asked why private equity firms haven't spent more money on acquiring digital media companies.
Aaron Stone, senior partner at Apollo Global Management said his firm has largely found digital opportunities through its portfolio companies.
As an example, he mentioned how film exhibitor AMC Entertainment and others in the sector created cinema advertising firm National Cinemedia a few years ago.
He also said Apollo bought CKX, owner of the American Idol franchise, in part to take advantage of digital distribution and other growth opportunities. "You'll find us making investments in other digital...businesses" through CKX over time, Stone said.
Jim Atwood, managing director at The Carlyle Group, which has had such investments as in Nielsen, echoed: "Digital media...really is an overlay over all of media. We filter [investments] through a digital lense, so to speak."
Stone said that it is "tougher" to figure out how business and distribution models will work because of digital. But companies that are in content creation have the upside in the digital age that "you will have many more ways to monetize content you own," he said. "Content owners will have some type of advantage."
While there are new digital distributors, he predicted that the exhibition industry will be fine as long as it emphasizes its advantages. "It provides a truly unique experience," Stone said. "That's what exhibitors need to continue to focus on."
None of the private equity panelists were ready to comment on the current process, in which Yahoo is looking to sell at least a minority stake to investment groups.