Dealmakers Impact Report 2011

David Shaheen, managing director and group head, JP Morgan’s Entertainment Industries Group

William Hageman, senior relationship manager, JP Morgan’s Entertainment Industries Group

Jason Sklar, senior relationship manager, JP Morgan’s Entertainment Industries Group

Through decades of Hollywood’s financial ups and downs, JP Morgan has been a steadying force, and its Entertainment Industries Group today has in place $10 billion in credit facilities. Group head David Shaheen leads a group of 15 execs lending and providing services such as arranging mergers and acquisitions as well as equity and bond offerings.

“It’s not a high-wire act,” says Shaheen. “We structure deals in a very specific way using our proprietary models and always considering what can go wrong.”

Typically, that means internally forecasting the cash flows associated with content assets that comprise the bank’s collateral to correctly size borrowing capacity. William Hageman and Jason Sklar are key execs at the unit. Earlier this year they were joined by Victoria Aparece from the firm’s investment banking group in New York.

JP Morgan’s entertainment lending goes back to the 1920s — literally to silent films — via Chemical Bank, which JP Morgan absorbed.

KEY DEALS: JP Morgan served as lead bank on Summit Entertainment’s $750 million recapitalization, Legendary Pictures’ $700 million revolving credit, Regency Entertainment’s $500 million credit facility and $500 million financing to MGM to fund its post-bankruptcy operations.

JP Morgan directly retains $1.5 billion of the $10 billion portfolio, with the balance syndicated to other banks. In an M&A deal, it advised client Bug Music, which holds the publishing rights to songs from Johnny Cash and other artists. Even if some entertainment borrowers hit hard times, the bank generally gets paid off because of its position as senior creditor.

SPARE TIME:
Shaheen: Sports, music, supporting youth service organizations.
Hageman: Following USC football, watching his kids grow up.
Sklar: Running, tennis, Music for Relief.

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