Hollywood Production Giant Collapses as Streaming Budgets Shrink
Creditors have taken control of MBS Group, a major supplier of production equipment for Hollywood studios, following its insolvency. The collapse highlights the ongoing impact of budget cuts across the entertainment industry.
Creditors have taken control of a giant supplier of production equipment for studios, including Warner Bros. and Netflix, after it became insolvent against the backdrop of budget cuts in the industry, reports the Financial Times.
The private credit arm of BlackRock, HPS Investment Partners, and investor Oaktree Capital are among a group of creditors that took control last week of MBS Group, which provides technical equipment, lighting, and sets to studios around the world.
The company provides services to more than 600 soundstages, including Silvercup Studios in New York, where "When Harry Met Sally" and "The Sopranos" were filmed, and Los Angeles Television City, where Ed Sullivan's show was filmed in the past. MBS was also behind the production of James Cameron's "Avatar" films.
Despite its extensive operations, the group struggled to cope with a debt burden estimated at hundreds of millions of dollars, against the backdrop of the decision by leading production companies to cut budgets since the streaming bubble burst in 2022.
The previous owners of MBS, Hackman Capital Partners and Affinius Capital, who acquired it in 2019 from the Carlyle Group for $650 million, withdrew from the group as part of the restructuring process.
The slowdown in Hollywood has hit many employment circles, including catering services, costume designers, agents, and actors. The crisis is occurring against the backdrop of budget cuts and the shift to streaming, where series usually consist of only 8–10 episodes compared to 22–24 in the industry's heyday.
