CBS CBS Corp

By Joe Flint 

CBS Corp. has formed a partnership with Kapital Entertainment, an independent television production company that has become a prolific supplier of content in recent years, the broadcaster said Friday.

Under the terms of the agreement, CBS will take an ownership stake in Kapital Entertainment and provide co-financing for its programming investments. CBS will also be able to distribute Kapital's shows around the globe.

However, Kapital will remain independent and operate separately from CBS Television Studios and the CBS network.

Headed by former agent Aaron Kaplan, Kapital has programs on broadcast, cable and streaming services including the ABC comedy "American Housewife," HBO's "Divorce" and Netflix's new zombie comedy "Santa Clarita Diet" starring Drew Barrymore. For CBS, Kapital is a producer of the comedy "Life in Pieces."

The partnership is different from the typical arrangement in which a producer signs an exclusive deal with one studio such as the agreement between comedy producer Chuck Lorre and Warner Bros. Kapital will continue to have the ability to partner with multiple studios and networks as it already does on its shows.

"This reflects a new era," said CBS Chief Executive Leslie Moonves. "It affords Aaron a great deal of freedom. I want him to have hit shows on CBS, but also NBC, ABC and Fox." The agreement with CBS also doesn't preclude Kapital from selling stakes in its shows to other networks or working with their studios.

Mr. Kaplan said the venture will allow Kapital to "continue to foster an artistic vision" and remain "nimble and flexible." Finance, he added, was not the main driver for the deal. "We did this because we saw an opportunity to create enterprise value without limiting our ability to work with other studios and networks," he said.

The first show in the works under the partnership is a family comedy for CBS called "9J, 9K and 9L." Kapital also has new shows in development at ABC, Fox and Freeform, the cable network formerly known as ABC Family.

Messrs. Kaplan and Moonves have children in the same school and often on the playground discussed the state of the television business. "This guy's done an amazing job of getting content out there," Mr. Moonves said. "That he has us backing him will make his chance for success all the higher."

Mr. Moonves didn't rule out looking for similar partnerships with producers. "Owning content is really important," he said.

Write to Joe Flint at joe.flint@wsj.com

(END) Dow Jones Newswires

February 10, 2017 10:14 ET (15:14 GMT)

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