Kevin Hart’s Media Company Sells $ 100 Million Stake to Private Equity

Kevin Hart has heard the doomsaying about the streaming industry that has rattled Hollywood since Netflix reported last week that it had lost subscribers in recent months.

But Mr. Hart, the prolific actor and stand-up comedian, is not buying it.

“There are so many different entities, there are too many different platforms, there are too many different places for the content of the world to die down,” Mr. Hart said in an interview from Belfast, Northern Ireland, where he is shooting a movie for Netflix. “If anything, it’s now amplified.”

Mr. Hart is a big backer supporting his thesis. On Tuesday, Mr. Hart’s media company, HartBeat, said it had raised $ 100 million from Abry Partners, a private equity firm in Boston. Abry is buying a 15 percent stake in HartBeat, a deal with people of knowledge, valuing the company at more than $ 650 million.

The deal makes Mr. Hart is the latest entertainment entrepreneur to tap the private equity money that is spreading across Hollywood. In the last year, Reese Witherspoon, LeBron James and Will Smith have all sold out stocks in their media businesses looking for firms to cash in on increased demand.

Valuations have soared thanks to the firms’ interest. Hello Sunshine, the company founded by Ms. Witherspoon, was valued at more than $ 1 billion in its deal with Candle Media, a new company backed by private-equity firm Apollo Global Management. Moonbug Entertainment, owner of the hit children’s show “CoComelon,” was valued at close to $ 3 billion in a deal with Candle Media.

Michael Nathanson, an industry analyst, said production deals with prominent performers would become increasingly common as streamers focused on profitability. Media companies want shows and movies that have the best chance of winning new subscribers, and name recognition is a reliable way to do that, he said.

“The only way you can break through the clutter is by quality or established brands,” Mr. Nathanson said.

HartBeat is a new company focused on comedy and cultural content created by the merger of two firms associated with Mr. Hart: Laugh Out Loud, a digital comedy firm that was conceived in 2016 as a subscription streaming service by the Lionsgate film studio and Mr. Hart, and HartBeat Productions, Mr. Hart’s production company.

Mr. Hart, who controls HartBeat, is stepping aside as its chief executive but will remain chairman of its board. He will be succeeded by Thai Randolph, who was the chief operating officer of both Laugh Out Loud and HartBeat Productions. Jeff Clanagan, Mr. Hart’s longtime business partner will be the company’s chief distribution officer, and Bryan Smiley, president of film and TV at HartBeat Productions, will be HartBeat’s chief content officer.

NBCUniversal’s Peacock streaming service, which is giving a deal to buy the first TV show that HartBeat produces, will continue to be a minority investor in the combined company. HartBeat executives will also own shares.

Abry Partners did not respond to a request for comment.

Ms. Randolph said both HartBeat Productions and Laugh Out Loud had been profitable before the merger but declined to provide details. More than 50 percent of HartBeat’s revenue will come from its studio arm, which deals with produce shows for streamers such as Peacock and Netflix. (Past productions include “Olympic Highlights,” a real-time sendup of the Summer Games, and “Fatherhood,” featuring a Netflix film by Mr. Hart as a grieving father.) The rest will come from a combination of businesses, such as content. Licensing and brand consulting work for companies including Procter & Gamble, Lyft and Sam’s Club.

The merger discussions began in earnest during a retreat in July at Los Cabos in Mexico, where about 60 employees from both companies got reacquainted after months of remote work during the Covid-19 pandemic, Ms. Randolph said. In a hotel suite near the beach, executives worked out a structure for the combined company, which also included a reshuffling of the senior leadership.

Mr. Hart predicted that streaming services within the competition would result in a market with several larger players vying for subscribers, each offering distinct content. He drew a comparison to the athletic apparel industry, where established companies like Nike continue to grow. As long as HartBeat delivers good looks, it will endure, he said.

“There should never be a time when people shouldn’t want to laugh, they shouldn’t drop their shoulders and just have a good time,” Mr. Hart said.

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