One of the oddities of 2020 is that a great many people in the entertainment and media industries became familiar with a complex form of securities offering: the SPAC (Special Purpose Acquisition Company).
Despite having the word “Company” in their name, SPACs are not really companies. Rather, they are piles of money looking for businesses to acquire. In 2020, over $60 billion was raised in the public equity markets by SPACs (more than four times the amount raised by SPACs in 2019), with approximately $4 billion specifically targeted for entertainment and media acquisitions. Since most acquisitions involve leverage (adding debt on top of equity), the amount of cash available to acquire entertainment and media companies due to the SPAC boom will be billions more.