Working at the intersection of media and technology, Steve Hurdle, a partner in Loeb & Loeb’s Los Angeles office, guides companies towards deals that make sense in today’s shifting entertainment landscape. With a proclivity for working closely with clients throughout the development and sale of their companies, Hurdle has become the go-to lawyer for various clients in the streaming and digital content world. But he doesn’t limit himself to that space because he finds that working with a variety of industries strengthens him as a dealmaker, enabling him to bring smart new ways of thinking to each client’s unique needs.
Lawdragon: Will you walk us through the mix of deal work that comprises your practice these days?
Steve Hurdle: The core of my practice is representing companies in all stages of their lifecycles—startup, early-stage and growth capital financing, and, ultimately, sale. I also represent buyers in M&A and JV transactions. Sometimes, I am brought in as counsel for a specific transaction, but more often, I quarterback a team acting as outside general counsel, representing the company in all of its corporate legal needs.
As a dealmaker, I have worked across a number of industries, but I spend most of my time working with companies and executives in the media and technology sectors and, more particularly, on deals that involve the intersection of both. Following that is real estate, and also a mix that includes aerospace and defense, food and beverage, consumer products and apparel, and travel and hospitality.
In addition, Loeb has a strong trusts and estates practice, and I represent a number of family offices, serving as outside general counsel helping with investments and structuring.
Most of my deal flow comes from representing companies over a long period of time, and then when any of them are considering a sale or merger, I am well-suited to counsel them as an advisor familiar with their needs and best interests.
LD: How much of your practice developed organically versus deliberately? Have you always been interested in facilitating deals?
SH: I have always been a dealmaker. I started my career at another California firm where I was able to work on a variety of M&A and capital markets deals for a range of clients. When I moved to Loeb as an associate, my practice developed somewhat opportunistically over time based on the partners I was working with. For example, I began doing media deals because I was working for a partner whose clients were entertainment companies, and through one deal, I worked on another, then another, and so on. Similarly, for real estate joint ventures, I stepped into a couple of key client relationships when another attorney left the firm, and grew from there. Once I found that I enjoyed working in certain sectors or on types of projects, I intentionally sought out opportunities in those industries.
LD: Working in the intersection of media and tech, along with the other industries you mentioned, must be fascinating. And I’m sure it keeps you on your toes!
SH: One of my favorite things about my practice is the diversity of clientele I interact with and the transactions I help bring to fruition. For example, it’s nice to work on the sale of a tech company and a real estate joint venture within a single day. I think that makes me a more nimble and dynamic attorney and allows me to bring ideas that work for one industry into another, where that idea may not have caught on yet.
I also enjoy being a trusted advisor to clients. Whether I am selling a company for its founder or representing a family office in investing the family’s personal assets, I like developing the connection with the client and the feeling that I am making a difference in an individual’s life.
Last, but not least, the work I am privileged to do with my media and technology clients is often at the cutting edge of new technology or unique deal structures, and that’s very exciting.
LD: How have you seen your practice change with the explosion of streaming and video on demand services? How has it changed the appetite and competition for M&A activity among media & entertainment providers?
SH: Media content consumption has changed dramatically over the past few years. The explosion of the Subscription Video on Demand (SVOD) market and focus on premium programming have completely altered the deal making landscape by providing more opportunities to our clients who are content creators. The impact on M&A is significant, with more buyers than ever before seeking to do deals, including company acquisitions, in order to acquire content. This model is also increasing the cost of doing business for these platforms and creating a need to charge more for SVOD services to be profitable. But with so many choices and competitors, acquirers are facing the issues of how to facilitate discovery of content the consumer wants, balancing this with the maximum number of services that consumers will pay for.
While all of this has developed into a tremendous new marketplace for creators, it has also upended traditional commercial deal structures and complicated the landscape of IP rights. For example, while a television show sold to a network might have back-end participations as the show is exploited and profitability can be measured based in part on advertising revenues attributable to the show, the same show sold to an SVOD platform runs into the twin difficulties of an inability to measure profits attributable to a single show, because the SVOD platform is measuring profitability in overall subscriber fees, and a general lack of desire on the part of the SVOD platform to disclose viewership information (though both of these are shifting a bit in creators’ direction as many platforms are now giving some viewership information as well as exploiting content off-platform).
LD: What recent or upcoming regulation will be impacting deal flow and fundraising in the media/entertainment/tech sectors in 2020?
SH: There are two areas of legislation that impact my clients’ appetite for and ability to engage in new deals. First, new Committee on Foreign Investment in the United States regulations provide for increased regulatory scrutiny of deals involving sensitive technologies and information. As a result, deals involving covered technologies and information, and particularly in cases in which the acquirer is based in or has a significant connection to China, face an additional obstacle in a process that has not yet been fully tested.
Second, California labor and employment laws around the categorization of independent contractors have had a significant impact on freelancers across all industries, but particularly in the media and technology industries. A significant debate took place with passage of Assembly Bill 5, or AB 5, intended to curb businesses’ use of independent contractors by establishing a test that effectively makes it harder for companies to claim that workers are independent contractors, instead of employees who are entitled to legal minimum-wage rates and benefits. In January, it was determined by a Los Angeles County Superior Court judge that California’s “gig-economy law” does not apply to the thousands of independent truck drivers in the state due to preemption by federal law. In our role as general counsel, many companies are turning to us to figure out how best to navigate the ruling and if it will be overturned for any more classifications of independent contractor workers.
LD: If you weren’t a lawyer, what would you be doing now?
SH: I would probably be a computer engineer or developer. Before I pivoted to law, I was majoring in computer science and electrical engineering at USC. I find that many of the same skills applicable to engineering are essential to lawyering—attention to detail, creative problem-solving and being able to see the forest, as well as the trees. I also love learning about new technologies. I think many of my tech clients appreciate that I take a strong interest in their products and businesses, and not just their legal needs.