ViacomCBS continues to shed non-core assets, announcing Tuesday a definitive agreement to divest its iconic CBS Studio Center and associated businesses to the partnership of Hackman Capital Partners and Square Mile Capital Management for $1.85 billion.
The deal, which was anticipated, was the result of a widely marketed sale process, which the company said attracted interest from a number of buyers for the Los Angeles studio lot. It property sits on a 55-gross-acre site in Studio City and consists of over 1 million square feet of space, including 22 stages, production office and support buildings, third-party tenant offices, a purpose-built broadcast center and filmable backlot locations.
The boom in streaming has created a global crunch of production space and an array of real estate developers and financial firms have jumped in with Hackman by far the biggest. The firm last week acquired Wardpark Film and Television Studios, one of the largest production facilities in Scotland. The week before, announced a deal with the City of Toronto to develop a new complex called Basin Media Studios. Its a major player in NYC, acquiring Kaufman Astoria Studios in Queens, the 1920s site that was the original home of Paramount Pictures, earlier this fall and Silvercup Studios in Long Island City last year..
The sale helps ViacomCBS raise needed cash to plow into content creation, the logic behind its unloading various assets including CBS’ historic Black Rock headquarters in NYC for $760 million in August. It agreed to sell publisher Simon & Shuster to Bertelsmann, owner of Penguin Random House, for $2.17 billion (lthough the Justice Department is suing to block that transaction on antitrust grounds.)
“This sale is part of an ongoing optimization of ViacomCBS’ real estate and operations portfolio and will allow the company to re-deploy capital to strategic growth priorities, including streaming,” said CFO Naveen Chopra.
At closing, CBS Broadcasting Inc. will enter into a long-term lease-back of the Broadcast Center, which is home to television stations CBS 2 and KCAL 9. ViacomCBS will continue to occupy stages and produce content on the lot, as well as enter into a short-term lease-back of certain portions of the property in order to manage the transition of ViacomCBS employees to other locations.
“We’re honored to have been selected as the new stewards of CBS Studio Center, one of the most celebrated and successful studios in Los Angeles,” said Michael Hackman Founder and CEO of Hackman Capital Partners. “The studio has been a hit maker from the days of Gunsmoke, Mary Tyler Moore, and Seinfeld, and we’re thrilled to continue our ongoing relationship with ViacomCBS to service its many successful shows currently filmed on the lot.”
“CBS Studio Center is an iconic property that has been home to many of television’s legendary programs over the years,” said Square Mile Capital CEO Craig Solomon. “With ViacomCBS maintaining an important presence at the property, we anticipate a smooth ownership transition and many more great years ahead.”
The transaction is expected to close in 2021, subject to customary closing conditions, including regulatory approval.