Peter Chernin on ‘Backrooms’ and Where the Smart Money Is Going in Hollywood

0:04Matt Belloni:This episode of The Town is brought to you by Starz's Outlander. Everything has led to this. The final chapter of the time-traveling drama and cultural phenomenon starring Sam Heughan and Catriona Balfe is only on Starz. Vogue declares Outlander one of television's greatest love stories, and the rap raves Balfe and Heughan have perfected this on-screen relationship. Industry voters can access all episodes at starsfyc.com. This episode is brought to you by Netflix, presenting Lord of the Flies. Based on the dystopian classic, this limited series follows a group of English schoolboys stuck on a desert island as tribes form and a violent power struggle emerges.

0:45Matt Belloni:Written by Jack Thorne, the award-winning co-creator of Adolescence, the Associated Press calls Lord of the Flies a powerful adaptation, and USA Today raves it is the best show of the year. Led by an astoundingly talented cast of young actors, it is an absolute must-watch. For your Emmy Awards consideration. It is Friday, May 29th. Backrooms is the big story of the box office this weekend. A low-budget horror thriller directed by a 20-year-old YouTuber is going to open bigger than most studio blockbusters. Kind of amazing. But the backstory on Backrooms includes a major media business figure you probably wouldn't associate with low-budget horror.

1:22Matt Belloni:Peter Chernin is a producer on the film, and his company, Chernin Entertainment, is the studio. It co-financed the movie with A24, which will release it. So I invited Peter on the town to talk about it, as well as a bunch of other topics in the media landscape. If you don't know Chernin, he's been a major figure in entertainment and media for decades now and has great insights. He was a top executive at Fox under Rupert Murdoch for more than 20 years, and he ran both the film side of the business and Fox Broadcasting. He greenlit everything from Family Guy to 24 and Titanic and Avatar. Since 2010, though, he's been the CEO of the Churnin Group, which invests in digital media companies.

1:59Matt Belloni:He was early in Pandora, Fullscreen, Barstool, podcasts like Crime Junkies, and he built an entertainment arm, first in Churnin Entertainment, which has made investments in projects like Planet of the Apes movies. He just did Apex and the show Man on Fire at Netflix. Both were number one at the same time. And then in North Road, which has production companies that make everything from Love is Blind at Netflix to sports documentaries. Earlier this year, he sold North Road to Media One, the French production powerhouse. And now he's got back rooms, plus a first-look film deal at Apple. Churnin's also one of the smartest thinkers about entertainment.

2:33Matt Belloni:So today I've got him on the show talking about the changing landscape, what's scary and what's not, what's next for Netflix, Paramount, all the others, and where the smart money is investing in Hollywood. From The Ringer and Puck, I'm Matt Bellany, and this is The Town.

2:52Matt Belloni:All right, we are here with Peter Chernin, who is the founder and CEO of The Chernin Group, and the founder of North Road, and the co-founder and partner at TCG, the investment group. Am I missing anything? That seems plenty to me. You got a lot of jobs. All right, well, welcome on the show and we're having you on in an interesting context because if you had said to me that back rooms a no budget horror thriller that is about to win the box office directed by a 20 year old youtuber that that was a peter chernan movie i would say no way so first of all how in the world did you get involved with this movie first of all let me clear it was directed by a 19 year old at the time it was now 20 right it was now 20 and i think we greenlit the movie when he was 18.

3:44Oh my God. You know, we have a division in the company called North Road Films, run by Corey Adelson. One of the things we've done there is we have a deal with A24 where we co-finance movies together. This was actually the second movie that we've done. We did one about two or three years ago. And so Corey's always looking for things to do that are interesting there. And she found this project, Backrooms. Was she scrolling the 4chan rooms to be fair there were two young producers who really found it yeah and they brought it to cory and then we brought it to a24 so we are both and generally the rough deal with a24 is we each put up 50 of the money we split the proceeds 50 of the money and then you know we don't get paid to produce they don't get paid to distribute it so it's a pure 50 50 venture and so uh you know but there were two young producers dan cohn and michael clear who found this thing on the internet and found kane and then brought it to cory cory got really excited and then we brought it to a24 and then you know we obviously co-produced the movie with several other people but we were quite actively involved from the studio perspective you know we we arranged for it to go to um vancouver we brought in craig ferguson who was really instrumental as one of the producers but we produced it at his facility in uh in vancouver through craig we brought in oz perkins to be a producer with us and so long legs i wasn't my company was overwhelming about and cory adelson who works for me but look there are a lot of people who are knock on wood hoping this movie is successful tomorrow instrumental a lot of other producers A24 has been a phenomenal partner on this, done an amazing marketing job.

5:35And so there's a lot of people that are involved, but from our company, it's particularly Corey Adelson.

5:40Matt Belloni:And at some point, James Wan and Atomic Monster came on board this film. When did that happen and why? So they were on right at the beginning. Right, okay. And the same thing with Sean Levy and 21 Laps. It's really the three main producing companies at Origination were Cherman and Atomic Monster and 21 Labs. Why does a project like this need so many producers? It doesn't. They all came along. I feel like that's the eternal question in Hollywood. Yeah, look, there were three or four people who were very instrumental every day on this movie. One from each of those companies and then also Craig Ferguson.

6:19There are a bunch of other bosses like myself, Sean, James. You know, I guess you deserve some credit for creating an environment where you find and pay for things. but we were not on the set producing this thing on a day-to-day basis it's interesting that this

6:34Matt Belloni:is a youtuber that is making the leap because you were pretty early investing in the creator space with full screen any i mean what did you learn out of that and did you think that in the year 2026 we would see this run of digital native filmmaking talent making the leap not just to getting Hollywood style movies made, but getting big audiences, you know, obsession just opened big and is keeps growing. And now we've got this other YouTube first movie that is going to be big. I absolutely believe that you did. Yes. We look, you know, we have been huge believers in the creator economy and YouTube going back.

7:20I think we invested in full screen 14 years ago. Um, look, It's also, to be fair, it's no accident. We are the only media company based in Silicon Beach. Our offices are in Playa Vista. We are across the street. YouTube is right over there. Facebook is right over there. You know, as a company, I'm deeply interested in technology. We've always been deeply interested. Going back to, you know, when I founded Hulu, before anybody else invested in streaming, I mean, I think the key is, and by the way, you talked about this on your IMAX podcast this week, which is you have to be relentlessly interested in technology.

8:02You have an obligation to do it. You have an obligation to do it both from a business perspective and creatively. And I think, you know, so we invest in Fullscreen, which was the original creator economy company 14 years ago. You know, we invested four or five years ago in Knight Media, which is the leading, you know, creator management company, managed Mr. Beast at the time that we invested in it. So we've always been a believer in that. And I think in terms of what I have ever imagined that YouTubers would be big Hollywood presence, absolutely. And if you look at, in my opinion, the key to Hollywood has always been finding new talent early.

8:39You know, whether you go back 100 years and they were looking to find people out of Broadway, you know, you go back to the days of Roger Corman, look at the amount of talent that came out of Roger Corman. That was in some ways an analog 50 years ago. You know, look at the number of people 25, 30 years ago who came out of MTV, doing MTV videos. You have to be relentlessly focused on where the next generation is coming from. And the next generation are making YouTube and TikTok shorts.

9:07Matt Belloni:Yeah, I guess I'm just a little surprised that that generation, with all the distribution opportunities that are available online now, they are gravitating towards this traditional in theaters motion picture experience. But you know what? We're seeing the economics that are being created out of this. And hard to match that with YouTube videos. Yeah, but I think it's deeper than that. Look, they obviously, YouTube is an incredibly effective place for them to connect with their audience. And the really good one, certainly Kane Parsons, is deeply connected to that audience. But conversely, you know, there are much bigger budgets available.

9:43And to the degree they have a more ambitious creative vision, it is easier to realize that with Hollywood budgets. And it is a different kind of both global and communal distribution model. There's a big difference between, you know, almost anything that's watched on YouTube is watched either by people on their phone, People on their PC by themselves, etc. There's something deeply satisfying to artists about creating things which people are going to watch in a communal environment.

10:13Matt Belloni:By the way, who do you think is going to buy IMAX? I listen to your podcast. I think I agree with you. I don't get the studio side because there's too many competitive pressures. A few people said we should have talked more about Sony because they're at least a technology company and might be interested. Yeah, I think it's more likely to be private equity. and I do think there may be more interesting talent opportunities than people have talked about. Oh, interesting. Look, there are big, big filmmakers who are obsessed with IMAX. So Chris Nolan takes his Odyssey money and becomes the face of IMAX with a backer behind him?

10:51Yeah, I don't know if they've become the face, but I believe that there are a number of big filmmakers who might very well be interested in making sure it goes to the right place. Interesting.

11:00Matt Belloni:Well, this is one of the reasons why I wanted to have you on, because you are super smart about the media landscape, and you have a sprawling empire that touches a lot of the areas that we talk about a lot on this show. First off, though, you launched North Road as a big, ambitious film company. Television got into reality TV, sports docs, all sorts of areas. Film television launched it in 2022, arguably the peak of peak TV. And then you sold it earlier this year, got French company to buy it. And some people in town looked at that and said, if Chernin is the smartest media investor in town and he's selling, that is a sign that we're in trouble.

11:48Matt Belloni:Why did you sell North Road? Yeah. So first of all, I'd say I'm incredibly proud of what we built. We raised$300 million. We sold this thing. It's been widely reported. So I'm not saying this, but what has been reported was between$800 million and a billion dollars. So I'm really proud of what we built. And I'm really proud. I think we built more EBITDA in a shorter period of time than any other independent company. And so we certainly did not sell it out of desperation. That being said, I think the platforms are so powerful. I think it's hard to be a standalone independent company. And I think we woke up and said, we got to get bigger.

12:28we need more scale. You look at the platforms, you look at their practices, you need more scale. They have such enormous scale. You need more scale to compete against them, etc. And so it wasn't that I felt like we were in trouble because we were actually growing every year. We were profitable every single year we did it. And I'm really proud of what we built. But I also felt like in order to thrive in the world going forward, you need to get bigger. That's number one. The second thing I felt is that the platforms at this point are all truly global. They are global platforms. I think most of them have more subscribers outside of the US than inside the US at this point.

13:06Certainly all the successful ones, and they've really globalized the distribution of content. I think no one has ever globalized the creation of content. I think if you look back historically, the big European companies were never particularly successful in the US. and the big U.S. companies never really cared about making content overseas. We all cared about selling our content overseas, but we never really cared about making it. And I think that it's important that the content companies become as global as the platforms are. I think you need to do that in order to thrive successfully with them.

13:40And so, you know, I've been thinking and talking to my partners here at North Road, Jesse, among others, about how do we get more global? because I think it was the most important thing. You know, we have gone out and bought. We bought a Turkish company. We bought a Mexican company. You know, we've looked at and had conversations with a bunch of other international companies. So we've been focused on getting more global, but this was an opportunity to do it on a macro level in the form of merger.

14:04Matt Belloni:So global is your focus. What are some other focuses? You have investments across the landscape. You're heavily invested in the podcast industry. Are you bullish on podcasts? Are you buying, are you drinking that Kool-Aid now? I think I started drinking that Kool-Aid 10 years ago. So I drank that Kool-Aid a long, long time ago. And just so people know, you have investments in the Crime Junkies podcast, the Rest is History company that does very popular podcasts out of the UK. And you have a couple of other big investments as well. By the way, we had a conversation with Ringer a long time ago. You know, we certainly built – there was a time – there was a moment in time when Barstool was the biggest podcast company.

14:43And we clearly controlled that company. I mean, here's what I'd say about podcasting. I am a huge, I think podcasting has gone the way of most media right now, which is, you don't want to be in the middle. You want to be a big podcasting company, or you want to be a very targeted podcasting company. And you don't want to be a bland sort of middle company, which is, I think, true of everything in the media business. And I'm very bullish on podcasting on those two ends of the barbell.

15:11Matt Belloni:I thought you were going to say it's gone the way of the rest of the media business and is trying to become television. Well, I think that, you know, certainly a huge group of the growth in podcasting has come in video, you know, mostly by YouTube. And now you're certainly seeing Netflix trying to be very aggressive in the podcasting space. Can Netflix hope to compete with YouTube? It's just, it seems a little sad to me that the content decisions Netflix is making right now seems to be hyper-focused on engagement and increasing this time spent, even if it means watching hour after hour after hour of podcasts, they don't care.

15:55Matt Belloni:They just want to try to get closer and closer to that YouTube metric of engagement without thinking more about the quality. And I know they're talking about it more on their earnings calls and such, but it seems to drive Netflix crazy how much engagement YouTube has. And I don't know if they're ever going to be able to win that battle. Well, I think that, first of all, I would never bet against Netflix. They have had an unparalleled 15, 20-year track record. And so we'll see. I think that, I guess I'd say, two slightly contradictory things there. Number one, engagement's an important metric for them and worth paying attention to.

16:35And, you know, they are as smart about analyzing data as anyone I know. So I'm sure that if they're focused on engagement, it's for good reason. That being said, I also agree with you that their fundamental raison d 'etre is to provide high quality video programming around the world and that they should not take their eye off. I'm not I'm not suggesting they are taking their eye off that ball, but they certainly shouldn't. And they should keep doubling down on that.

17:04Matt Belloni:You think they'll go after another studio? First of all, I was shocked when the Warner deal was announced. We were all shocked. I still would say no at this point. You know, in the fun, something, I was both shocked they went after it, and then I was shocked how quickly they dropped out at the moment they dropped out. Oh, you were. Interesting. I thought that once they were in, I always thought the Ellisons would get it because if you know David at all, he is relentlessly focused on proving himself and becoming a media mogul, and he just was not going to let that asset get away. But the reason I say I was shocked is Netflix had it.

17:40Yeah. Netflix had a signed deal and, you know, they had topping rights, everything else. And so that's the sense in which I was shocked.

17:49Matt Belloni:But the shareholders didn't like the deal. No. But you know what? You know, your job as someone running this company is to create shareholder value over time. And if you have real conviction that you're making the right bet, you're willing to make some rough decisions with shareholders. And look, by the way, Ted and Greg certainly seemed to be willing to do that during the period of time when it was their deal. Sure. But I think something rattled them. I don't know whether it was shareholder reaction. I don't know whether it was, you know, the regulatory reaction, and that may have been worse, and something rattled them.

18:21And, you know, I don't think there is anything quite as compelling as Warner Brothers out there.

18:26Matt Belloni:So you don't think they're going to go after Sony or Universal or even Lionsgate? I don't, but by the way, I didn't think they were going to go after Warner. So don't pay any attention to me. No, no, no. You, you know, most deals come across your desk. So I know you, you have insights. This episode is brought to you by Hulu. Chase Infinity stars in The Testaments, Hulu's new coming of age drama series set in the world of The Handmaid's Tale. Variety calls it an exemplary follow-up to the original series and a magnificent coming of age story. Also starring Anne Dowd and Lucy Halliday, The Testaments is for your Emmy consideration in all eligible categories, including Outstanding Drama Series and Outstanding Lead Actress in a Drama Series for Infinity.

19:11Matt Belloni:For more information, visit hulu.com slash fyc. Now on Acorn TV. There's a killer on the loose. Brooke Shields stars in the new original murder mystery, You're Killing Me. You spin some crackpot theory and I find the evidence. I solve mysteries for a living. I think I'm good to go. Murder has met its match. You cannot be here. This is a police investigation. I've written you. What does that mean? He was a big city cop with a small jurisdiction. Boomers are so cute when they flirt. You're killing me. All new episodes now on Acorn TV. This episode is brought to you by FX's The Lowdown. From acclaimed Reservation Dogs creator Sterling Harjo, the series stars five-time Academy Award nominee Ethan Hawke as Lee Raybon, A self-described Tulsa trussorian whose fixation on the truth tends to create more problems than it solves.

20:04Matt Belloni:This gloriously off-kilter noir is an AFI television program of the year and one of 2025's most critically acclaimed shows. The Lowdown is available for your Emmy consideration on Hulu and Disney Plus for bundle subscribers. What's going to happen to Fox post Rupert? You know, I think that that has largely been resolved, which is the family dynamics, which were truly complicated and would have been very complicated, have been resolved. Talk about shocked. Were you shocked that they agreed to, the kids agreed to go away? No. You were not? No. I'm shocked that, you know, I guess I was shocked that the process in court went on as long because it was obvious that kids could go away at whatever point they got fairly compensated.

20:50Right. And so, you know, I was shocked up to them. I wasn't shocked there. But so that part has been resolved. And then, look, I think you've got to say that Fox clearly is pretty well positioned. And B, I think they deserve a lot of credit in the technology and new media side. Arguably as much credit as any media company over the past four or five years.

21:13Matt Belloni:Just for buying Tubi and the podcast company. Red Seat Ventures, which is a podcast company, which, you know, we made a deal with them recently on Crime Junkies. Those are really smart acquisitions and they've been run really well. So I think that Fox is in pretty good shape. And, you know, I think they also on some level deserve credit for not making a lot of big mistakes in the past few years. Yeah, it's just that there are so many things about that company or both of them, Fox and News Corp, that are hallmarks of Rupert. You know, do you think the New York Post stays after Rupert? Do you think, you know, any of these things, the California Post, any of these things that they're doing in the journalism space, it just, it feels like the moment Rupert's not around, that stuff goes away.

22:04Yeah, although I believe, to the best of my knowledge, Lachlan actually cares quite a bit about the New York Post. You think he does? Yeah.

22:11Matt Belloni:Okay. Well, you would know better than me. I was really focused on the Fox at all. And, you know, News Corp clearly has great strength in the Wall Street Journal, great strength in HarperCollins, great strength in the Australian real estate business. I can't speak to the rest of the newspaper business. Speaking of Fox, by the way, Jim Cameron is still upset that you guys tried to not greenlight Avatar more than 15 years ago. You know, that's not a fair characterization. You heard what he said. He said something about how you wouldn't make the movie until he threatened to take it to Disney. Yeah, I think that's his view of it.

22:48We went, you know, it was at the point which Fox greenlit it. It was close to double the most expensive movie ever made. which by the way had been Titanic, which I had made. And you go through the normal hand wringing in making a decision like that.