23 Capital takes Innovative Financing to the US

Insights

Posted: 03.10.18

Share article

23 Capital opens offices in Los Angeles and New York to build its presence in the US sports, music and entertainment sectors

The US is experiencing a revolution in its sports, music and entertainment markets, the world’s largest. To take advantage of a host of opportunities that are opening up in innovative financing, 23 Capital has hired two leading media and entertainment specialists to head a major roll-out of its finance offering in the US.

David Pogoda has joined as Managing Director and Head of 23 Capital North America. Previous to this he was a partner for 10 years at Evolution Media Capital (EMC) – the Los Angeles-based media and entertainment investment and advisory firm, and investment bank of Creative Artists Agency (CAA). Working alongside him is Managing Director Mathew Carvajal, a 10-year veteran of JP Morgan’s Entertainment Industries Group.

Pogoda and Carvajal are based in Los Angeles – at the crossroads of the content and digital-technology industries – and will cover music and entertainment across North America.

A big gap in a huge market

Before moving into media and entertainment, Pogoda started his career in speciality lending at Cerberus Capital Management. This combined experience means he is well aware of the market gap that 23 Capital aims to fill – providing flexible loan finance coupled with industry-leading strategic advice to content creators and owners across sports, music and entertainment. Neither banks, with their rigid lending criteria, nor hedge funds – with their supercharged return expectations – can deliver the service these rapidly evolving industries need, he says.

When he first met the 23 Capital team, Pogoda instantly felt a natural fit with the company.

“The exciting part is they haven’t had anyone on the ground in the US until now, yet they’ve already done some incredible deals with some of the biggest names in sports, music and entertainment. With our experience and connectivity, Mathew and I can really grow this business in the US.”

Content businesses of tomorrow

Pogoda and Carvajal intend to build on 23 Capital’s rapid growth in Europe. North America is a natural choice because global demand for US-produced sports, music, and entertainment content is growing fast.

The two executives plan to focus on opportunities in traditional media and entertainment, such as music, film and television, as well as next-generation sports, music and entertainment businesses that are still too nascent for traditional financiers to pursue.

“Digital content, eSports, mixed reality, live entertainment – these are all areas we see as the future of media,” says Pogoda. “We want to be at the bleeding edge of providing strategic capital to those industries.”

He points out that eSports – multiplayer video games played by professional competitors – are attracting a fast-growing youth audience and are already the most-watched television programming in South Korea, for example.

“We believe there’s an opportunity for 23 Capital to become the pre-eminent lender in these markets, providing capital against income from sponsorship contracts, franchise fees and media rights,” says Pogoda. “If we can grow with these forms of new media and become the preferred provider of capital, that creates a real scalability opportunity for us.”

Artists in charge of their brands

Pioneers of US entertainment such as JJ Abrams, Jay-Z and Tyler Perry have shown how content creators can become powerful brands in their own right, with much greater control and ownership of their work than previous generations of artists.

As such, the opportunities for flexible finance providers such as 23 Capital are huge, says Carvajal.

“We can directly engage with talent and entrepreneurs to help utilise their brands to grow scaled operating companies. With creative capital, we have the ability to support smaller-scale talent and independents, all the way up to large-scale private equity backed businesses operating in the media industry.”

“We won’t operate as a reactive capital provider,” he goes on to say. “We want to be strategic partners; we have the ability to grow with every business through their own lifecycle.”

23 Capital chemistry

Even though the scale of the opportunity is obvious, Pogoda and Carvajal stress the importance of joining a team with the right chemistry to pursue it.

“I’ve been impressed by 23 Capital’s focus on building a culture of supporting each other and working as a team,” says Pogoda. “They understand the need for industry expertise in order to do this and the resource we have to scale this business and go to market is amazing.”

Carvajal adds: “23 Capital has a great ability to adapt to different business models. The team understands the risks and we can work with a huge variety of clients, whether an eSports company, a digital-content producer, a traditional media company or an independent songwriter… The sky’s the limit.”

To contact David or Mathew please find their details below:
David.Pogoda@23-cap.com
Mathew.Carvajal@23-cap.com

Tags: US, Entertainment, Music, Los Angeles, New York

Suggested reads

29.10.19 | Press

2020 nominations open for inaugural Deal of the Year award in association with 23 Capital

Industry dealmakers to be honoured as new Award category is unveiled

17.10.19 | Insights

US Expansion: The 23 Capital growth story

October marks one year since we launched offices in New York and Los Angeles. Our expansion into the US has delivered significant results and established 23 Capital's international presence.

07.10.19 | Insights

The 2019 Rugby World Cup: Capturing the Moment and Creating Legacy

How can brands and organisers leverage what is the first Rugby World Cup on Asian soil? 23 Capital's Global CMO, Darrell McLennan Fordyce, shares his insight into how best a legacy can be built from the tournament that will sustain the sport at all levels.