LeBron James’ SpringHill Co. is merging with Fulwell 73, a union of two Hollywood production companies that their owners hope will better position them for success during a contraction in entertainment.

The two companies have been in talks about merging for months, as Bloomberg first reported, and the deal is expected to close before the end of the year. Their investors, a group that includes Nike Inc., Epic Games Inc. and Fenway Sports Group, will put a further $40 million into the business as part of the transaction. The companies didn’t otherwise disclose the terms of the deal.

James’ longtime business partner Maverick Carter will serve as co-chief executive officer of the new company, alongside Leo Pearlman from Fulwell. Carter and Ben Winston, one of the partners in Fulwell, have known each other for several years and co-hosted a joint birthday party a few years ago.

London-based Fulwell is a leading producer of live events and unscripted programming, such as the Grammy Awards and The Kardashians, while Los Angeles-based SpringHill is in the vanguard of a new crop of entertainment companies backed by major athletes. Carter and James founded SpringHill in 2020, uniting three of their media ventures under one banner. It produces film and TV such as the Netflix series Starting Five and does a lot of branding and marketing work.

“On day one we become a fully scaled entertainment company—not just two production companies,” Carter said in an interview. Production companies of all shapes and sizes are grappling with a decline in output from major Hollywood studios and streaming services. But the one thing that cures all is the next big hit.

—Bloomberg News