LA CorpGov: 9 takeaways across several industries

Operators and investors,

I took executive notes during the 2nd LA CorpGov Forum in San Marino a couple of weeks ago, with panels on sports investing, shareholder activism in media, entertainment in the AI era, IPO readiness, and a California view of venture and PE governance.

Different room from the PE conferences and closed events I usually write up. Same underlying question, asked from the board seat instead of the deal seat: who is accountable for the number, and what does the board actually see before the quarter closes.

Today's issue covers 9 takeaways, with the speakers named where it helps you follow up.

1. Sports became an asset class faster than governance

The sports investing panel (Thomas W. Hulick of Strategy Asset Managers, Baird Fogel of Eversheds Sutherland, Noah Francis of J.P. Morgan Private Bank, and David Carter of The Sports Business Group) put the private equity side of sports at roughly $55 billion.

That matches the public record. Institutional capital has committed more than $55 billion to sports assets since 2019, and the Boston Celtics sale to a group fronted by Bill Chisholm closed at $6.1 billion with Sixth Street inside the structure. The NBA has since loosened its private equity ownership rules again.

What made the panel useful was the governance layer underneath the headline prices. Gambling and casino regulation, sponsorship money flowing into college sports, and European football ownership rules all came up as constraints that sit above the cap table. A minority stake in a league asset comes with a rulebook written by the league, and the rulebook changes.

If you are underwriting sports or sports-adjacent media, franchise economics are the easy half of diligence. The harder half is who can change the terms you underwrote, and how quickly they can do it.

2. Entertainment audience growing on multiple fronts

The same panel kept returning to how the audience changed. Taylor Swift's presence in the NFL broadcast, the Brad Pitt F1 film, and the studio collaborations that followed all pulled women into fandoms that had been sold to men for decades.

Treat that as a commercial input. New audience means new merchandise mix, new sponsorship categories, new broadcast inventory, and different pricing power in the next media cycle. Any model built on the old demographic split is underwriting the wrong market.

3. Media activism has two exits (both structural)

Sagar Gupta of Anson Funds framed the media and entertainment situation bluntly, as I heard it: you either transform into a technology company, or you merge.

Pete Michelsen of Qatalyst added the capital markets view. The allocation conversation today is how to put $5 billion into Microsoft or Anthropic, not $250 million into a media company that may or may not work. He was openly skeptical about anything under roughly $10 billion getting sustained institutional attention.

That prices the scarcity of institutional attention rather than the scarcity of capital. A sub-scale public media asset can be operationally fine and still trade at a discount, because the marginal dollar has somewhere more liquid to go.

Michelsen also asked whether the SaaS selloff is now unwinding, which is the same question from the other direction. Both are bets on where the next five years of index money sits.

4. Ten films carry the year and not just in studio

The entertainment panel (ElizBeth Jones of Atomic Venus Media, Willonius Hatcher of AI and the Culture, Jason Alejandre of Game Mechanic Studios, Steve Griffith of E8 Entertainment, Evan Hainey of Untitled Entertainment, and Daphna Edwards Ziman of Project Rise Partners) started from the box office structure. Roughly 10 films take about 90% of the box office each year, and IMAX is in the blockbuster business by design.

The 2026 counterexamples both came from cheap production and existing fandom. Obsession cost about $750,000 and has grossed close to half a billion dollars worldwide. A24's Backrooms, built on internet and game-native IP for about $10 million, passed $400 million and became the studio's highest-grossing film.

For anyone financing content, outcomes stay as concentrated as ever while the entry ticket keeps getting cheaper, provided the audience already exists. That is a different risk profile from greenlighting one $200 million tentpole.

5. AI allowed in studio but fandom carries titles forward

The panel's consensus was specific about placement. AI is already doing the background work: ticketing flows, billboard and marketing variants, filler that keeps an experience running longer. The foreground stays human, because that is what the audience is paying for.

Daphna Edwards Ziman, who co-chairs Project Rise Partners, the consortium behind last year's $13.5 billion rival bid for Paramount Global, was direct about audience limits. Surveys across states show people refusing AI in the theater. The fandom does not connect to characters it cannot meet, there is no merchandise, no post-film life, no reason to show up in a room.

We see a milder version of this in digital distribution. AI content is fine where the audience tolerates it and a liability where the brand promise is the human on the other side. The industry tolerance differs, and knowing which side of that line your portfolio company sits on is a revenue decision.

6. Live business and media hitting records

Broadway closed the 2025-2026 season at $1.91 billion, its highest-grossing season on record, in what everyone in the room agreed has been a brutal stretch for the rest of entertainment.

The explanation offered on stage was that people want to be in the same room with a story they already love. Series get relived, spinoffs get staged, and AI tools widen who gets to tell a story in the first place. Access got democratized, so the premium moved to the experience that cannot be copied.

I flagged the same signal in the last issue following SuperReturn. When AI saturates the feed, the fully offline experience gains value. Portfolio companies with a live, physical, or in-person component should be testing price this quarter rather than discounting.

7. IPO readiness bogged by paperwork

The capital markets panel (Nicole Brady and Jeff Meyer of Protiviti, Ramey Layne of Vinson & Elkins, Joseph Fish of Infinite Equity, and Josh Waldron, interim CFO of Scale AI) spent most of its time on operational readiness rather than windows.

Going public is expensive, and most of that cost recurs through the quarterly reporting machine long after the listing day. Nicole Brady made the sharpest observation of the session: AI companies cannot close their books. The classification questions are genuinely new, from what counts as capitalizable versus expensed to how token costs behave, and AI tooling is not closing anyone's books faster.

If you are holding an asset with an IPO in the plan, the close calendar is the readiness test. A company that cannot close in five days as a private company will not close in five days with an audit committee watching.

8. AI being “overcompetent, but no world skills”

The line I wrote down verbatim, on where AI sits in professional work: it is like a freshly graduated lawyer with five years of knowledge and zero experience.

That is the most useful framing of AI capability I heard all month, and it survives contact with operating reality. Trained on the doctrine, with none of the practice behind it. No negotiation sat through, no contract watched while the counterparty got difficult, no consequence carried for being wrong.

Deploy it where knowledge is the constraint. Do not deploy it where judgment and accountability are the constraint, which is most of what a controller, a general counsel, or a board actually does.

9. On governance and board rules

The venture and PE governance panel (Ryan Keating of EisnerAmper, Brent Granado of Sweetwater Private Equity, and Thomas Courtney Jr. of The Courtney Group) was the most quotable stretch of the afternoon, and the least comfortable.

Ryan Keating, whose firm audits a long list of AI companies, described books that are a mess at companies with nine-figure valuations, some without a controller in the seat. Capital concentration makes it worse, with the overwhelming majority of new money going into AI and a disproportionate share of it landing in California.

What the panel expected in boards summarized briefly:

• Governance is not compliance. Compliance is the filing. Governance is oversight, ethical duty, and internal controls that work between meetings.

• Sit in the trenches, not on top. Brent Granado argued the board should be with the operator rather than above them, which is also the difference between a quarterly review and a usable relationship.

• Somebody has to own AI risk. Thomas Courtney Jr. put it as every company needing an AI director, and nobody having one yet.

• Nothing new should ever be said in a board meeting. If the first time a director hears it is in the room, the reporting cadence already failed.

On composition, the practical advice was three seats early, five at most, and an odd number to avoid a tie. The recurring failure modes were two founders splitting 50-50 with no tiebreaker, and undocumented promises about equity, bonuses, and comp made in conversations nobody wrote down. Keating also made the case for advisory boards as a complement to the statutory board, which remain underused for how cheap they are.

Private equity meets governance

PE boards run differently again. Thomas Courtney Jr. described more aggressive KPIs and a different governance posture, which is what happens when the owner is also the person who has to sell the asset. I had a follow-up conversation with him that confirmed these hypotheses, along with other M&A directives discussed earlier this month at SuperReturn.

And governance flows into organization. Data rooms tell you how organized a company is before anyone reads the numbers, and the more conversations you have, the more the pitch gets refined. Both are simple qualifiers that partners ignore or realize down the line.

The keynote fireside with Paul Haaga, former chairman of Capital Research and Management Company, and Dick Drobnick closed on the broader point: governance quality travels across private companies, public companies, nonprofits, and NGOs, and the discipline is the same everywhere.

Three checks worth running this week:

1. Take your fastest-growing portfolio company. How many days does it take to close the month, and who signs off on the classification questions that AI spend created this year?

2. Look at your board roster and name the person accountable for AI risk. If the answer is the whole board, the answer is nobody.

3. Pull the last two board decks. Was anything material heard for the first time in the room, and what should have surfaced two weeks earlier?

Great job to CorpGov’s organizing team and their impeccable work on all fronts - one strong set of panelists and a productive networking event.

If you were at The Huntington and I missed your panel takeaway, hit Reply and tell me what stuck with you.

Mario

🤖 The miss is the opportunity in enterprise AI, not the reason to walk away. Where a frontier model keeps breaking on a repeatable workflow is exactly where a thin custom layer makes it reliable enough for diligence or portfolio reporting, a point Parag Vaish made well on Deal by Deal.

📊 A value creation advisor should be judged like an operating hire. The test is whether they will own a number and classify every value claim as realized, run-rate, forecast, enabled or risk avoided, which I broke down in how to judge a value creation advisor.

🔄 Continuation vehicles now match buyout funds on returns, so the real constraint is eligibility. Morgan Stanley data puts them at 1.4x median MOIC against 1.3x for buyouts, yet GPs at SuperReturn said maybe 1.5 in 10 portfolio companies can actually carry one, more here.

📉 Milestone tracking looks rigorous right up to the point it measures activity instead of value. Consolidating 40 suppliers on schedule reads green while contracts that renewed at unrenegotiated rates erase the booked savings, the synergy gap I unpacked in this post.

🎙️ Economic growth is pulling bond and equity markets in opposite directions, with debt investors getting higher yields while equity bulls eye another leg up, as he frames it here - by Noah Francis

🎙️ Image, video and 3D AI models still get judged on vibes while text models get leaderboards, so he joined the OpenArt AI Arena Creative Council to give creators a real scoreboard - by Willonius Hatcher

🎙️ The forum's panels on entertainment, sports and shareholder activism are now available as fully produced video coverage on CorpGov - by John Jannarone

From SuperReturn US West:

🎙️ Liquidity tools are reshaping how private equity returns capital, so selling a company no longer means walking away, the throughline of his DPI vs IRR keynote - by Viman Singh

🎙️ Passive PE indexing does not work because paying high fees for median returns is a losing structure in hedge funds or private equity, the case he makes here - by Michael Oliver Weinberg

🎙️ Retail and institutional demand is converging on evergreen structures, per a new CACEIS and Private Equity Wire report on semi-liquid funds - by Cyril Schopfer

🎙️ For private debt managers raising in Europe, evergreen structures and pre-marketing now drive investor demand more than headline fund size, as he lays out here - by Alessandro Silvestro

🎙️ A private markets manager's annual meeting is a core investor touchpoint that gets wasted when it is run as a box-ticking exercise, his read here - by Josh Clarkson

🎙️ What actually compounds inside a growth-stage company comes down to leadership and scaling discipline, the subject of his new conversation with John Suh - by Ivan Nikkhoo

🎙️ Home Depot is the highest-returning US stock of the last 45 years, a reminder he shares here that durable compounding beats short-term multiple chasing - by Rajib Chanda

🎙️ Economic policy and national security are now one conversation, and a whole-of-nation approach shapes where capital and industry flow - by Patrick Murphy

🎙️ Specialty capital is backing content libraries, with BondIt now financing the 20th-anniversary theatrical re-release of Pan's Labyrinth - by Matthew Helderman

🎙️ Every portfolio company faces the tension of investing in talent while protecting profitability, the question behind a panel Libra Value is hosting - by Gordon Lin

🎙️ How an M&A scoop actually breaks says a lot about why deal communications strategy matters as much as the deal, his story here - by Russell Sherman

AI agents running inside OpenAI's research environment posted 53 user-provided images to public hosting sites without the lab's knowledge, and the company says it cannot identify the people affected. For any firm piloting agents on diligence files or portfolio data, that is the governance gap to close first, because open internet access with no audit trail turns confidential material into exposure.

Shopify now lets browser-based AI agents complete checkout, including Shop Pay, while Amazon and Adidas block the same agents. For consumer and DTC portfolio companies, agentic checkout is a near-term revenue channel, and the platforms that expose structured commerce APIs will capture the agent traffic the holdouts turn away.

Blackstone shelved a roughly $3bn collateralized fund obligation built on 700 ageing fund stakes after investors balked at the leverage and the age of the assets, nearly a quarter of which are 15 years or older. The read for LPs and GPs chasing DPI is that the secondaries market will fund liquidity, but not at any structure, and long-dated books priced for a 12% yield still have to clear a buyer.

When an AI tool gets a diagnosis or a medication wrong, the accountability still lands on the clinician, with the hospital exposed only where its guidelines were grossly negligent. For healthcare portfolio companies deploying clinical AI, that liability line is a diligence item, and the value case has to price in human oversight and the malpractice risk that rushed rollouts create.

High-margin crypto trading-bot SaaS: trading-bot platform across Bybit, OKX, and BloFin with 203 subscribers, recurring revenue, and a light weekly workload. $588,358

Soleandesire online trading marketplace: a marketplace connecting buyers and sellers across a wide range of goods, supporting both auctions and direct purchases. $765,000

Vybes Unlimited motorcycle brand: premium motorcycle sweepstakes and apparel brand with an engaged audience, proven foundations, and clear growth headroom. $777,810

5-year-old Home & Garden FBA store: established Amazon FBA business in home and garden, earning roughly $29,500 a month at a 3.9x profit multiple. $885,000

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