Media rights are becoming a cornerstone of private equity strategy, says $1.8B firm co-founder

It can seem like the world is flooded with content creators these days, but while the media landscape has been diluted in the 21st century, the demand for quality sources can mean big money changing hands, with opportunity for investment.

And as disputes over streaming economics and intellectual property rights intensify, media rights are no longer a niche corner of alternative investing, they are fast becoming a core focus for specialized private equity firms.

One of the most active players in this space is Cordillera Investment Partners, a $1.8 billion private equity firm focused on niche, non-correlated assets across the media and entertainment ecosystem.  Gus Araya, co-founder and co-managing partner says that the appeal of media rights starts with their fundamentals.

“We believe media rights and royalties are appealing to private equity investors because they can offer stable, contractually backed, and recurring cash flows that may be uncorrelated,” Araya told InvestmentNews.

He added that these assets are supported by powerful structural trends that continue to reshape global entertainment consumption.

“Many rights-backed assets benefit from strong structural tailwinds such as global demand for content, streaming-driven competition, and the globalization of media consumption, which continue to broaden monetization opportunities across formats and geographies,” Araya explained. At the same time, he noted, capital has not flowed evenly across the industry. “Certain areas of the market remain fragmented and underfinanced, especially for mid-tier creators, independent producers, and digital-native rightsholders.”

Financing gaps

Those gaps in financing are precisely where Cordillera sees opportunity. When asked which segments of media and entertainment are most underserved, Araya pointed to creator-driven ecosystems that have scaled audiences faster than financial infrastructure. “We believe the most interesting areas of media and entertainment are those with strong demand tailwinds but limited access to flexible capital,” he said.

Digital-first intellectual property stands out in particular. “Creator-driven digital IP, such as YouTube channels, short-form video, and emerging digital brands, remains highly fragmented and undercapitalized despite compelling economics,” Araya noted, emphasizing that creators increasingly want capital without surrendering ownership. He also highlighted other overlooked segments. “Additional underserved segments include mid-market video gaming creators, and team-adjacent sports media assets.”

Shifting consumer behavior has fundamentally changed how intellectual property is valued. As streaming platforms mature, Araya sees a decisive pivot in what matters most. “As streamers pivot from subscriber growth to retention, deep libraries of evergreen IP, global rights control, and multi-format adaptability have become essential differentiators,” he said.

Audience fragmentation has also redefined scale. “The most valuable IP is no longer necessarily the broadest, but instead the most engaging with loyal fanbases that travel across formats and monetization channels,” Araya explained. That dynamic, he believes, is pushing investors to think long term. “We believe this is shifting valuations toward long-duration optionality and multi-platform revenue potential.”

While music royalties have attracted intense investor interest in recent years, Araya struck a notably cautious tone. “Our view is that music royalties have become far more mainstream and less compelling than they were a decade ago,” he said, citing increased competition and fewer mispriced opportunities. He contrasted sustainable investing with headline-driven speculation. “Short-term hype has centered on headline-grabbing mega-deals, inflated valuations driven by abundant capital, and trend-dependent spikes such as newly released music with volatile earning curves.”

Private equity structure

One of the defining shifts Araya sees is in how private equity structures capital for creators and rightsholders. “Private equity today can provide structured, non-dilutive capital that lets creators unlock liquidity from their IP while still keeping creative control,” he said.

 “By separating economic participation from decision-making authority, PE investors can help rightsholders monetize predictable royalty or media-driven cash flows without forcing them to give up ownership or editorial independence,” Araya added.

Beyond music and streaming, he believes some of the most compelling opportunities lie in media-native sports and entertainment formats. “New format leagues and alternative sports ecosystems are built from the ground up as media-native, IP-driven properties, rather than legacy competitions retrofitted for modern consumption,” he said.

These models, he noted, are engineered for scale. “Certain emerging sports and leagues are scaling rapidly by designing the sport, broadcast product, fan engagement model, and commercial stack simultaneously.” That approach allows operators to control the entire ecosystem. “This lets them own the full value chain, including competition rules, data capture, direct-to-fan channels, and global content distribution.”

IP investment framework

Investing in intellectual property requires a different risk framework than traditional assets. For Araya, diligence starts with cash flow durability and legal certainty.

“The primary focus is on the quality and stability of cash flows, legal clarity of ownership, and structural protections in the credit or acquisition framework,” he said. While these assets can be resilient, he cautioned that they are not risk-free. “They still carry variability tied to consumption trends, catalog concentration, and platform dynamics.”

As a result, rigorous analysis is essential. “Lenders must assess multi-year historical cash flows, decay patterns, diversification across titles or revenue sources, as well as the strength of credit structuring,” Araya said, adding that “rigorous IP due diligence” is critical given the risks of ownership disputes or litigation.

Looking ahead, Araya sees several defining shifts shaping the future of entertainment finance. “We believe that over the next five years non-dilutive IP financing will become far more prevalent as creators increasingly retain ownership of their work,” he said.

Gaming is another major inflection point. “Video game financing will evolve to resemble film finance, driven by longer-lived monetization cycles and recurring, UGC-based revenue streams.” And despite ongoing disruption, one category remains essential. “Sports will remain the last true must-carry media category,” Araya concluded, “creating compelling opportunities in adjacent markets.”