Peter Chernin's "2.0" Fund: $700M to Shower on "Quality" Media Buys

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Peter Chernin

"We call this fund TCG 2.0, while The Chernin Group was 1.0 and, if things work out, we'll have a 3.0 and a 4.0," says co-founding TCG partner Mike Kerns.

The 9-year-old Chernin Group disclosed on Nov. 5 the existence of a $700 million investment fund dubbed TCG, but the entity had already been doing business for about a year, spending $200 million for equity stakes in at least nine companies, including Exploding Kittens (tabletop games), Zola (wedding registries) and Dadi (male health).

If those companies seem to be out of co-founder Peter Chernin's media wheelhouse — the former CEO of Fox Group, 68, runs Chernin Entertainment, which has produced Hidden Figures, The Greatest Showman and the upcoming Ford v Ferrari — it's no accident.

"[W]e found that our thesis in media was transferable to what was occurring across all consumer industries — from commerce and health and wellness to gaming, consumer finance, and more," Chernin and his top partners wrote in a Nov. 5 letter to employees unveiling TCG.

Beyond its TV and film production arm, Chernin Group has amassed a portfolio of investments in about 70 media (or media-adjacent) companies, including Pandora, the digital music firm. It remains a holding company, while TCG was founded strictly as an investment firm. (Confusing, sure — most in the industry were already referring to the company founded in 2010 as "TCG.")

"It's a new name that we obviously tied to the first," says co-founding partner Mike Kerns. "We call this fund TCG 2.0, while The Chernin Group was 1.0 and, if things work out, we'll have a 3.0 and a 4.0."

Those with knowledge of TCG say that it explored about 1,000 companies before making its first nine investments, and it has a database of a few thousand more, with a goal of taking majority and minority stakes in at least 20 firms, spending $25 million to $50 million on each.

It has already doubled down on a few, with stakes in Headspace (a digital meditation platform) and Action Network (sports betting) residing in both the holding company and the investment firm. Exit strategies involve taking some portfolio companies public and selling others to larger entities.

"The TCG-Chernin model has a lot of logic to it," notes analyst Jimmy Schaeffler of The Carmel Group. "It has active participation and common-sense profit going for it. The idea of using content to get viewers to buy a niche product is not that far from the idea of using content to get to viewer data."

One majority stake taken by TCG is in Food52, a kitchen and food digital media firm started a decade ago as a blog by a couple of New York Times food editors. Says Kerns, "They produced high-quality content, built an organic audience and converted that audience into purchasing products without spending money on Google and Facebook."­

This story first appeared in the Nov. 13 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.