Private equity (PE) commits billions to film and TV year after year. But often, while the deal logic may be compelling, the legal infrastructure underpinning those assets is not.

The firms making these bets in recent years are not novices. Leading private equity sponsors have deployed hundreds of millions of dollars into major studios, production companies, and content platforms, frequently through significant minority investments and strategic partnerships. Preqin reported in October 2025 that private capital continues to flow into content IP, studio infrastructure, and AI-driven production tools across the United States and Europe. Media leaders are recalibrating from rapid streaming expansion to sustainable profitability, creating sustained demand for independently produced and acquired IP. 

What these investors are buying, however, can be considerably more complex than the term sheet suggests. A film or television property is not a single asset; rather, it is a bundle of distinct, time-limited, and territorially divided rights (underlying IP, music, distribution, guild residuals, talent performance rights), each held by a different party, governed by a different contract, and subject to different legal regimes. The value of a content library depends entirely on the integrity of that bundle of documents.

Chain of title: The due diligence problem PE underestimates

“Chain of title” is the documented, unbroken sequence of ownership transfers that establishes a clear legal right to exploit content. Ensuring a clear chain of title requires verifying every agreement, from the earliest underlying rights through to the current owner. This can involve a litany of options, first looks, IP assignments, development agreements, work-for-hire arrangements, co-productions, guild consents, and clearances, among other agreements.

The problem is that many production companies, particularly the founder-led businesses PE has favored, have historically maintained inadequate records. Rights may have been informally granted, partially assigned, or optioned without proper documentation.

The consequences are not theoretical. In Brown v. Beatty, producer Mark Brown alleged he had paid approximately $50,000 in 2007 to purchase rights to the documentary Iverson and spent years funding the production. When funding dried up, the director and Brown parted ways. The director then signed a deal with a television network – without Brown’s knowledge – and the network paid approximately $325,000 to license the film. Brown only discovered the film had aired when he saw it on television. He filed claims of breach of contract, copyright infringement, and conversion. The case illustrates precisely the risk a PE investor inherits without clear chain of title diligence: Competing claims can surface years after the fact, and often after value has been extracted by someone else.

The AI threat: A new and unpriced liability

Generative AI has created a new category of liability that did not exist in most agreements signed before 2023. The voice, image, and likeness of on-screen talent can now be replicated by AI tools, and the legal framework governing consent and ownership remains unsettled. 

The legislative response is accelerating but uneven. New York enacted two statutes in late 2025: one requiring disclosure of “synthetic performers” in advertising; the other extending right of publicity protections to digital replicas of deceased performers, with statutory and punitive damages available. Both face potential federal pre-emption. In the United Kingdom, performers have no standalone right of personality and must rely on a patchwork of rights under the Copyright, Designs and Patents Act 1988, data protection, passing off, and privacy – none of which provides reliable standalone protection. 

For investors and buyers, this creates three problems. First, pre-AI talent agreements may be silent on image and voice replication, exposing portfolio companies to claims. Second, libraries built on older agreements may carry embedded liability not reflected in the valuation. Third, in jurisdictions with broad personality rights, litigation risk is real and increasingly well-funded.

Ask three questions before you sign

1. Do existing talent agreements address AI replication of voice, image, and likeness, or are they silent?
2. Are image and voice rights explicitly licensed to the content owner, or retained by the performer?
3. Which jurisdictions govern personality rights claims for the key talent in this library?

Mitigation steps

Engaging entertainment-specialist IP counsel at the term-sheet stage (rather than as a checkbox at closing) can help to unearth these complexities, and any legal ramifications, upfront. Commission a full chain of title review across all material content assets as a condition of exclusivity. Review all talent agreements for AI-related gaps; any agreement signed before 2023 should be treated as presumptively silent on AI. Stress-test the rights stack across key territories, particularly where distribution agreements pre-date the streaming era. Ensure that representations, warranties, and indemnities specifically address chain of title and AI talent rights – a general IP warranty is not sufficient. And in doing so, build exit diligence into entry: A future strategic buyer will commission exactly this review, and defects unfixed at entry will likely resurface at exit.

The opportunity in entertainment is real. Global content spending exceeds $250 billion annually, and projected expenditure in experiential entertainment alone is expected to exceed $350 billion by 2030. But the underlying legal architecture holding many valuable entertainment assets together is not self-explanatory, not forgiving of shortcuts, and changing faster than most diligence frameworks can track. Investors who treat rights complexity as a legal hypothetical – rather than an investor’s problem – risk finding out too late that they bought something more troublesome than they anticipated.