BY ALEX WEPRIN | HollywoodReporter.Com

Troy Warren for CNT

“It does frustrate classic industries to play defense,” Aryeh Bourkoff said at the Tribeca X conference Friday.

WarnerMedia’s merger with Discovery. Amazon’s acquisition of MGM. Sinclair’s finance raise to launch a direct-to-consumer streaming sports push.

All these deals are critical pieces of a rapidly changing and consolidating entertainment and media industry. And it just so happens that one boutique investment bank, LionTree, has been an advisor on all those agreements.

LionTree founder and CEO Aryeh Bourkoff explained his thinking behind the state of technology, entertainment and media at the Tribeca X conference in New York on Friday.

“The consumer has a lot of power,” Bourkoff said. “That is the phenomenon of the direct-to-consumer landscape we all live in.”

“If the consumer doesn’t like your product, they will churn. And the churn rates have been going higher and higher,” he added, “It is no longer just Amazon’s game to play.”

And so, Bourkoff says, companies are increasingly choosing to play offense.

“It does frustrate classic industries to play defense,” Bourkoff said. “In order to play offense in a direct-to-consumer digitized environment … you have to regain financial flexibility to get back on your front foot, reorient your capital structure.”

“If you are going to compete with Amazon, it is not for the faint of heart,” he added, noting that offense for some companies means making a “grand pivot” like Netflix did when it shifted to being streaming-first.

“Amazon, if it was still offering books today, and that’s all, people would churn off of it,” he said. “Companies have to evolve. I think you will see a lot more companies that offer direct to consumer products, like Spotify or Netflix, offer more and more services,” he added, giving the example of Netflix getting into gaming.

Bourkoff, who said he got many deals done in person during the pandemic by creating a “safe space” for dealmaking, said that it became clear early on in the pandemic that different types of companies would have different needs.

“Companies that had a lot of cash, like technology companies, knew that they were going to play offense,” he said. “Other companies that were too small, too independent needed more scale, and other companies that needed cash, we would help them find capital.”

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