‘Motion Leads to Value’: Aryeh Bourkoff Aims to Rewrite the Narrative for Big MediaJanuary 7, 2021
LionTree CEO Aryeh Bourkoff is a master dealmaker.
But the prominent investment banker isn’t content to simply facilitate M&A transactions. His loftier goal is to help rewrite the narrative for Big Media at a time of massive transition in the industry.
As Bourkoff explains on the latest episode of the Variety podcast “Strictly Business,” the key to LionTree’s success since its launch in 2012 has been its work with media moguls and investors alike to consider strategic alternatives to the status quo.
The big question at present is “how do you take segments of the media industry and reorient them to a better narrative that has strategic value that unlocks upside and minimizes downside to create a more defensible asset mix,” Bourkoff says.
Indeed, every major media conglomerate is sizing up its holdings, and there has been a push to streamline and divest non-core assets at AT&T, Disney, ViacomCBS and elsewhere. Companies need to look far out on the horizon and determine what they need — and don’t need — in their arsenal to compete.
“There are problems that have to get solved,” he says. “It’s not just dealmaking for dealmaking’s sake.” CEOs and shareholders have to consider “what does the consumer appetite look like at the end of the year and how do you position your company for that?”
Bourkoff weighs in on how the pandemic has up-ended the marketplace and what that means in the long run. In the short-term, however, he doesn’t see the public health crisis as putting the breaks on media’s realignment.
“There’s a certain frenetic nature to dealmaking coming in 2021,” Bourkoff predicts. “In the first half of the year, with the recovery embedded with some tailwinds — I think it will be one of our busiest years.”
The turmoil as the industry moves from a wholesale-retail model in pay TV — the engine of earnings for most congloms — to direct-to-consumer platforms with global reach might be enough to scare off casual investors. But for savvy investors, it’s a perfect time to find opportunity, in Bourkoff’s view.
“It’s the reinvention that’s interesting to investment, not the static. Stagnation leads to decay; motion leads to value,” he says. “To invest in that reinvention — that’s the whole game. That’s what is most interesting about the media industry — it’s always re-inventing itself. It has to.”
Podcasting, gaming and other topics were touched on during the wide-ranging interview.
Bourkoff sees robust growth ahead for the podcasting business. “Audio has been in our view growing a lot faster than even video and we think it will continue to do so.”
Gaming and related activities have accelerated during the lockdown conditions of the pandemic. LionTree is studying the sector, he says, “not just video games as an activity but video games as a meta-verse. Is ‘Fortnite’ the new internet?”
Moreover, Bourkoff sees potential for gaming and Hollywood to become more closely aligned in the content arena. “If there was a movie studio for sale, I would bet on a gaming company looking to buy it as much as a media company or a technology platform,” he says.
The strength of the capital markets will help the industry get through the transition to streaming-based platforms. “It’s not just debt financing being strong, but equity financing being strong, probably as strong as it’s been in my lifetime,” he says.
Bourkoff offered a few predictions for “2021-plus,” as he jokes, in keeping with the argot of streamers. Among them: “Music concerts and festivals will come back faster than movies” and “the sports industry will be completely realigned and adjusted.”
“Strictly Business” is Variety’s weekly podcast featuring conversations with industry leaders about the business of media and entertainment. A new episode debuts each Wednesday and can be downloaded on iTunes, Spotify, Google Play, Stitcher and SoundCloud.
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