Billionaire Jeff Skoll is one of the world’s great philanthropists with a special place in his heart for social activism–second to none. Just ask him.
Backstory: Mr. Skoll made his initial fortune as the 2nd man in on the creation of eBay and cashed in his chips for somewhere between $1-2billion, give or take a billion.
Around the time he made his money, Mr. Skoll got into activism. He created foundations, he donated to charities, he sponsored those in need. He was the male (Canadien) version of Mother Theresa…
…and then in 2004, he got bitten hard by the entertainment bug. It was time to utilize his socially transformational into moving images that could shine a light on all the issues in the world that needed change. A ‘pro-social media company’ as he described this entity in an interview with the Stanford Social Innovation Review in Spring 2012. He says it wasn’t about the money. He was willing to lose plenty of it. Years later, Skoll was even quoted as saying that he had poured “hundreds of millions to date [into the company], with much more to follow”, and that the studio had yet to break even (in a NY TIMES article). We have no proof of this investment because Participant is/was a private company.
And over the next twenty years, his company Participant Productions aka Participant Media aka Participant grew and shrank and grew and invested more and less (mostly less via co-financing and inexpensive documentaries) in lots of projects with a social bent to them. Some films and tv shows were successful. Some weren’t…but, Mr. Skoll assured everyone that it wasn’t about making or losing money because he had billions of dollars. It was about ‘the cause’. Well, maybe that’s true, but think about the fact that he convinced a nonprofit charity focused on obesity to fork over $900,000 so that Participant could reduce the marketing costs of their own film. Very selfless of ‘bottomless pit of cash’ Mr. Skoll.
Which is why it came as a shock when Mr. Skoll circulated an internal memo that thanked his staff for their service on the one hand and fired them on the other. One of his cited reasons “…Since then, the entertainment industry has seen revolutionary changes in how content is created, distributed and consumed,” and curiously he added that “Although I have not been active in the day-to-day management of Participant for some years…”.
The Deadline article suggested that Mr. Skoll had an audit done of the company and decided to pivot to something else. The Hollywood Reporter echoed this from an unknown source saying the audit revealed how bad the company’s financial bottom line was. The Hollywood Reporter also said that Mr. Skoll had tried to sell the company for the past year to people like his fellow eBay founder Pierre Omidyar and Laurene Powell Jobs. That Mr. Skoll’s compromised health for a decades-old back injury may have reared its head. Or that the financial losses from a failed TV cable network called PIVOT in 2015 in the supposed hundreds of millions of dollars foretold doom. Or maybe it was after a serious relationship with a girlfriend ended or after the Amblin pact ended. Or after an investment in Summit to get distribution ended once Lionsgate bought Summit. Or after the death of his greatly admired head of Documentaries, Diane Weyermann.
These excuses sound plausible in a vacuum, but we don’t believe any of them.
Let’s knock ‘em down one by one and then get to what we think the real reason was for the Jeff Skoll’s decision to lower the boom.
THE AUDIT—Mr. Skoll always had a team of extremely intelligent numbers people (inside and outside the company) who accounted for every penny. What would an audit reveal that Mr. Skoll didn’t already know? It’s amusing that he did an audit not just once, but twice over the course of the company’s history because audits are what billionaires hide behind to justify firing people. ‘Don’t blame me. Blame the audit.’
SELL THE COMPANY: If Participant was on a downward trajectory the last several years and was losing money, why would Mr. Skoll’s fellow Rise Fund investor and eBay founder friend, Pierre Omidyar, buy a declining asset? And how about Mr. Skolls’ other fellow Rise Fund investor, Laurene Jobs? She owns a very successful management/production company. How does a depreciating Participant asset fit into her portfolio? It doesn’t. Mr. Skoll never considered selling it.
HEALTH: Mr. Skoll suffered the serious back injury decades ago. Since then, he has set up dozens of companies and charities. Surely, he wouldn’t have done so had his injury forced him to slow down. Not only that, but Jeff even says in his memo that he hasn’t been active with Participant in years…so, where is the stress?
PIVOT CHANNEL: The loss of money on this venture may have been significant, but we’ll never know. Regardless, the channel was shut down almost 10 years ago AND Mr. Skoll wasn’t the only investor. EMC aka CAA’s investment arm and TPG were deeply invested as well. If this bad investment spelled Participant’s demise, it would have happened not long after Pivot shut down.
THE AMBLIN PACT: Mr. Skoll invested eight to nine figures in Amblin and subsequently got bought out by Universal for a handsome profit. How would a financially successful investment negatively impact Participant financially or production-wise? Mr. Skoll could have easily aligned with another company and/or distributor as he had been doing for decades.
SUMMIT/LIONSGATE: This mention by the Hollywood Reporter is certainly a factor, but in the complete opposite way and we’ll explain below.
DIANE WEYERMANN: Beloved by all, but if anything, the company carried on in her honor to keep her name alive in every doc they are involved in. A company is bigger than the individuals who work for it…especially when that company has a global mission.
THE LANDSCAPE: Participant has been hitting the ball all over the field for years. Netflix. HBO. Theatrical. Self-distribution. All of it…so, the ‘changing landscape’ excuse makes no sense. If anything, the change in landscape broadened the reach of social activism. We think Mr. Skoll was being disingenuous in his memo. It was bullshit.
THE WGA/SAG STRIKE: Maybe, but wouldn’t the company have simply downsized like 99% of the other companies in its category to weather the storm? Considering how important social causes were to Mr. Skoll and considering he consistently maintained that it wasn’t about the money…this too makes no sense.
Which leads us to what we think was the real cause of the end of Participant…
—Mr. Skoll’s greed.
Since 2006, the ‘company with a message’ had been used to divert everyone’s attention from non-social activist investments and when those investments paid off, Mr. Skoll dumped his tax write-off (aka Participant) like a hot potato and left devout Hollywood groupies singing his praises as though his intentions all along had been selfless. How can we make this argument? Let’s evaluate the timeline.
2004/2005: Mr. Skoll had no entertainment investments other than Participant. The company kept overhead low, but stumbled out of the gates with an expensive two film co-finance warner bros deal. Syriana did ok. North Country was a bomb. A third co-financed film with Warner Bros got awards attention–Good Night, and Good Luck…but, was also a financial loser.
2006: Mr. Skoll quickly realized that Participant was a dog with fleas investment so he secretly expands the investment portfolio and joins a group that invested 48% of $1billion in Summit Entertainment in exchange for equity. It’s fascinating that he didn’t tell anyone outside of a close circle of advisors until 2009. Why did he hide this information? Probably because it wouldn’t be a good look for a do-gooder to be doing what most rich people do—try to become richer.
In 2009, Mr. Skoll reveals that not only did he invest in Summit Entertainment, but that he has a 5 year production/distribution deal with them at improved terms b/c he was also an investor. Do you see how he manipulates the storyline? It’s not about the shitload of money he’s going to make when Summit gets acquired…it’s about doing good. Well played, Mr. Skoll.
Summit refinances $750 million worth of debt and paid out $250 million to the investors—of which Mr. Skoll was a significant participant…and when that happened, Mr. Skoll announced he would expand staff and production…but, mostly staff (which is a lot cheaper than financing movies). Yet again, he’s telling everyone to look at another shiny object in the distance.
In 2012, Mr. Skoll’s Summit Entertainment investment paid off a second time when Summit was acquired by Lionsgate for $412 million cash plus assumption of $300million in debt and $60million in stock…and he increased his net worth yet again.
And from there, the financial successes keep coming while Participant’s name is kept mostly in the shadows as a significant outside investor.
2014, a $350 million investment fund with TPG (Formerly owner of CAA) and EMC (CAA’s investment arm). Pivot TV lost money, but another investment, Platform Media, paid off big-time when it was acquired in 2019.
2015: a $300 million investment in Amblin (Spielberg), of which Mr. Skoll’s share was bought out for a tidy profit by Universal Studio in 2020.
And from the moment that the Amblin deal worked out, Participant’s activism became passive. Yes. Covid. Yes. Writer and actor strikes…but, in the name of bottomless pits of cash and changing the world, why couldn’t Mr. Skoll just downsize until the seas got smoother? He had to sink the ship?
One thing isn’t yet clear. What was it about the day in April 2024 that Mr. Skoll feel was the right time to cash in his chips and leave the poker game? One thing we know for sure is, that by April 2024, most if not all of Mr. Skolls investments in Hollywood had wound down…so, maybe there were a few other ‘under the radar’ bets made that Mr. Skoll had to collect on? We’ll do more digging.
Meanwhile, stay tuned for Part II of the Jeff Skoll story as we take an in-depth look into some of the many charities/funds/organizations that he attached himself to. Those, too, might not be what they seem.