| SpringHill, the media company co-founded by basketball star LeBron James, has never made any money. The company lost $28 million on sales of $104 million last year, according to documents obtained by Bloomberg News. SpringHill lost $17 million in 2022 and is on pace to lose millions more in 2024. Hollywood production companies that sprouted during the past decade to serve the growing demands of streaming services are struggling as those services cut back on production and scrutinize budgets. This market correction has impacted everyone – from the world's largest entertainment companies, which have cut staff, to prop houses, real estate developers and the independents like SpringHill. "The entertainment market shift in 2022/2023 toward profitability brought rising costs, slower buyer decisions, and impacts from industry strikes, prompting us to recalibrate, including writing off underperforming projects to position ourselves for future growth," SpringHill Chief Executive Officer Maverick Carter said via email, adding that the company is expected to exceed projections this year. SpringHill recently agreed to a merger with Fulwell 73, the British production outfit behind The Kardashians and the Grammy Awards, a deal that will give the combined company more scale during a challenging business environment. The company, which will have 250 employees, is aiming to be profitable by the end of next year, following a round of staff cuts. The numbers also highlight the challenges specific to celebrity-backed production companies. These startups were able to raise money at inflated valuations relative to their business fundamentals and have since struggled to live up to the lofty expectations. James is a trailblazer among athletes. He started a media enterprise while still playing at the highest level, inspiring peers such as Stephen Curry and Kevin Durant to do the same. Carter, James' longtime friend and business partner, runs the business day to day. They produced films and TV shows, ran a marketing company, sold apparel and started Uninterrupted, which produces their talk show The Shop. In 2020, James and Carter combined all of their media businesses under SpringHill, named for the apartment complex where James grew up in Akron, Ohio. SpringHill succeeded where many other celebrity-backed ventures did not. While James is the company's chairman, most of what they produce doesn't involve him being in front of the camera. Save for the occasional appearance on The Shop, or a starring role in basketball-themed projects like Space Jam and the Netflix docuseries Starting 5, James is still focused on playing ball. Carter has earned the respect of the business community and sits on the board of concert giant Live Nation. "We built this business with LeBron, not around him," Carter said, adding that James "remains deeply engaged in driving the vision and mission he helped shape, focusing more actively on certain passion projects." James' involvement helped the company raise $15 million from Warner Bros. in 2015. In 2020, the pair raised $100 million from investors including Guggenheim Partners and Elisabeth Murdoch. A year later, they added RedBird, Nike and the owners of the Boston Red Sox to their investor group in a deal valuing the business at $725 million. The company had less than $80 million in sales at the time and was losing money. SpringHill, which grew to 200 employees, raised money at the top of the market for production companies, back when streaming services were adding billions of dollars to their budgets each year to chase new customers. Reese Witherspoon's Hello Sunshine was acquired in a deal that valued the business at about $900 million. Yet as the market crashed, those lofty valuations started to look excessive. Hello Sunshine has fallen far short of profit forecasts. As part of the deal with Fulwell, SpringHill investors will put a further $40 million into the business. "The new company has the scale, investors and teams needed to adapt to where this change is heading," Carter said. Many celebrities have used their fame to make successful investments in consumer businesses, whether it's George Clooney with tequila, Selena Gomez with makeup or Rihanna with fashion and makeup. Ryan Reynolds has done it a few times, while James and Carter have been several lucrative investments. But when it comes to media, the list of successes is short. Kevin Hart just brought in new leadership to revamp his company while Dwayne Johnson is thinking about how to expand his. Producing good movies and TV shows is hard, and having a celebrity producer doesn't guarantee success. Moana 2. It grossed $221 million in the US and Canada this long holiday weekend, the biggest Thanksgiving opening in Hollywood history. The film has already taken in almost $400 million worldwide. Thanks to the continued successes of Wicked and Gladiator II, both of which passed $300 million in total worldwide sales this past week, Hollywood studios and theaters registered their biggest Thanksgiving week ever. US movie theaters dedicated 75% of all showtimes to those three movies, according to The Box Office Company. I saw Kneecap, Conclave and A Real Pain last weekend. Kneecap, a rowdy dramedy about an Irish rap trio, was my favorite. But Conclave feels like a best picture contender. | 
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