Hollywood veteran Chernin forms new studio with acquisition of Red Arrow Studios

LOS ANGELES (Reuters) -Hollywood veteran Peter Chernin announced Wednesday that he is forming a new studio, betting that the appetite for new content will remain strong despite the pall cast over the streaming industry by Netflix Inc's recent subscriber losses.

The executive, best known for such films as "Ford v Ferrari," the revival of "Planet of the Apes" and "Hidden Figures," is creating the North Road Co, to produce movies and television shows for the U.S. and international markets.

The studio will combine Chernin's namesake film and television production company, Chernin Entertainment, with two other studios. It acquired the U.S. operations of Red Arrow Studios, maker of the Netflix reality show "Love is Blind," on June 30 from ProSiebenStat.1 Media SE in a deal that one source valued at $180 million.

Separately, North Road took ownership of Words + Pictures, a producer of documentaries, buying out the interest of Chernin Entertainment's cofounder, Connor Schell.

Chernin raised $500 million in equity financing from Providence Equity Partners, and another $300 million in debt financing through managed affiliates of Apollo Advisors, to execute the expansion. He told Reuters he believes that industry spending on movies and scripted TV series, reality shows and content produced outside of the United States will continue to grow as streaming services compete to attract new subscribers.

"There are hundreds of millions of subs outside the United States that they're all going to be competing aggressively for," said Chernin.

Cable networks and broadcasters are other customers.

Many in the industry fear a looming era of fiscal restraint, as Hollywood reassesses its spending on content amid questions about the underlying economics of streaming. A handful of projects, including J.J. Abrams' "Demimonde" for HBO Max and Ava DuVernay's animated series "Wings of Fire" for Netflix, have been canceled.

Chernin, whose studio is making two films for Netflix and new seasons of its Apple TV+ series "See" and "Truth be Told," said he has seen his studio's scripted business double year over year. There's a growing appetite for international fare as well as for reality TV shows, which prompted him to expand the studio's capabilities.

Asked about his decision to switch from a potential seller, as was reported in late 2021, to a buyer, Chernin responded: "I think it would have been short-sighted to sell."

(Reporting by Dawn Chmielewski in Los AngelesEditing by Matthew Lewis)

By Dawn Chmielewski