When Christoph Fisser, together with partner Carl L. Woebcken, bought Germany’s historic Studio Babelsberg from Vivendi Universal in 2004, the asking price was 1  euro.

Vivendi had acquired Babelsberg, previously run by East German state film group DEFA, after the fall of the Berlin Wall and invested more than half a billion dollars upgrading the studio’s infrastructure. “They put in hundreds of millions and, every year for 12 years, they lost money,” says Fisser. “In the end, they were happy to get rid of it.”

Vivendi was so sure Babelsberg would go bust, they gave the new owners 18 million euros ($20.3 million) to keep them afloat for the first year. “Under German bankruptcy law, if you sell a company, and it goes under in the first year, the creditors can go after the former owners,” explains Fisser. “So we took the money, and we invested it.”

It paid off. Nearly 20 years and more than 100 productions later — among them Quentin Tarantino’s Inglourious Basterds, Wes Anderson’s The Grand Budapest Hotel, Steven Spielberg’s Bridge of Spies and Lana Wachowski’s The Matrix Resurrections — Fisser and his team have turned Babelsberg, which is located just outside Berlin, from a basket case into one of the globe’s most technically advanced backlots.

No less an authority than Netflix content chief  and co-CEO Ted Sarandos called Babelsberg’s new LED Studio — which offers virtual production technology that allows filmmakers to digitally re-create far-flung locations, even imaginary ones, without leaving the confines of a soundstage — “the best anywhere in the world.”

In January, TPG Real Estate Partners, part of private equity giant TPG, which also owns Cinespace, the second-largest soundstage operator in North America, as well as Creative Artists Agency (CAA) and DirecTV, acquired a majority stake in Babelsberg. The price tag: 4.1  euros ($4.6) per share, a price that values Babelsberg well into eight figures. “Not a bad rate of return on that original 1 euro,” jokes Fisser.

Talking to THR‘s Etan Vlessing, he also addressed why he sold the stake now, future plans for Babelsberg and the outlook for co-producing films.

Why did you sell to TPG?

We received a lot, actually an astounding number, of offers. Last year, all the major funds that are active in this space approached us. The consideration was: Should we bring on another investor? And if we do, it should be someone that understands our business and helps us, as a shareholder, helps the studio. TPG are very financially sound, and they are ambitious, they want to invest in media. And the fact that they own CAA — which now wants to acquire ICM, making them even bigger — is another advantage.

At Studio Babelsberg, we are in constant contact will the studios, and we have producers we know well that always come back to us. But for productions that the agencies package, where CAA brings in financing and puts things together, in the past we were always too late. By the time we heard about the projects, they had already gone somewhere else. We expect that will change now. That doesn’t mean all CAA projects will come to Babelsberg — but at least we’ll know about them and be able to compete for them.

What’s going to change on the management front? Are you and Carl still in charge?

We’re committed long-term to the studio. We’re still invested in this business and so long as [TPG] lets us, we’re going to keep running things. I think anyone who’s done business with us knows how much we enjoy running this studio. It’s a joy to be able to work here. It’s always been that way, and I hope it will continue to be so. We didn’t sell the company to retire. Just the opposite.

How independent will Studio Babelsberg be from TPG’s other companies, including the other studios under its Cinespace group?

We’ll be completely independent. We’ll be brought under the Cinespace name, but we’ll remain completely independent in our decisions, in what projects we take on and the running of the business. I think TPG has understood that Germany is a very special case, and they know the values of the relationships that we have built up here over many years.

Why sell now? Is it because the whole studio sector is expanding?

Exactly that. It’s the time for investment. We built our LED Studio and have done our first project [drama series 1899] for Netflix. It was a major learning process for everyone, but we see it offers completely new possibilities to shoot movies. It’s much, much better than greenscreen. It allows for a completely different quality. It’s a different way of producing, but we’re convinced that LED-technology is the future. Of course, there are directors who like greenscreen, because they can add things in postproduction. With the LED screen, you have the final image in the monitor. So you have more preproduction and less postproduction.

It’s not just that the images are better, that the shadows are sharper and don’t need to be touched up like they do on greenscreen. It’s also a more ecological technology because you don’t need to fly around the world, you can literally make the film here and play the world into your LED studio. It’s unbelievable. We can move from Mars to the jungles of Vietnam to the Alps. Anything is possible. And because a studio, in corona times, is a location that’s easier to isolate and easier to protect, that’s a further advantage. Not to mention, it is much, much easier to budget. We’re convinced LED technology will be the next revolution for filmmaking. But it requires a lot of investment. Having a strong financial partner behind us makes it a lot easier for us to do that.

Most studios these days seem to be investing in expansion — new backlots and soundstages are being built everywhere these days…

There’s huge demand right now because all the streamers are starting to produce themselves. It’s been a tremendous boom for the studio business. We’re likely to build more ourselves, but given Germany’s current tax incentive model, it doesn’t make sense for us. We’re a good size right now, we’re big enough to shoot two huge projects — Matrix Resurrections and [the upcoming Tom Holland-starrer] Uncharted — parallel to one another. But Germany’s tax incentive model just isn’t competitive enough to attract enough big production to make it worthwhile expanding our studio space.

But we’re amazed at what’s happening at the moment. Studios are popping up everywhere: in the Philippines, in Mauritius. Everyone is building right now. They’re building like crazy in England, in Ireland, all over. But you can build all the studio space you want. In the end, you hit the limit when it comes to crew. This is still a business, thank God, where people matter. You can have the best soundstages, and it won’t help a bit if you don’t have the crew. That’s my question for all the new studios being built in England: Can you service all those productions that are supposed to fill them?

Will Studio Babelsberg continue to produce films yourself or as a co-producer?

We’ll continue to do both — to work as a pure service provider, but also produce on our own. We want to develop and produce more of our own original content, though the focus here will be on German-language productions.

What’s been the impact of the coronavirus pandemic on the studio business?

We came through corona incredibly well. We haven’t lost a single day of shooting because a production had to be shut down. I mean, look at what happened with Mission: Impossible, which had to shut down three times! We also got lucky. Matrix Resurrections was set to start on the day that Germany went into lockdown, but we were able to push that.

So far, things are going OK with omicron as well. We’re in pre-production right now for shoots that are set for March. We hope the infection curve will be going down by then, and we’ll be in a much better situation. But it’s tough. We are testing constantly. We’re incredibly strict with social distancing regulations, with disinfecting, with using closed bubbles of crew to prevent cross-contamination. And, with only a few isolated cases, we’ve come through unscathed.

Looking back to 2004 when you bought Studio Babelsberg from Vivendi Universal for a single euro, what were the turning points in the studio’s success story?

Before we took over, Roman Polanski had made The Pianist here. We didn’t have anything to do with the film, but it went on to win three Oscars, and it was a great calling card for us and the studio. Then came Bourne Supremacy, which showed we could produce a really big film. V for Vendetta, which has become such a cult movie. And it was through that movie that we met [Matrix producer] Grant Hill, who introduced us to the Wachowskis. That was incredible luck. They brought Speed Racer here. It wasn’t a huge success, but it was a really big film, and it showed people we could handle that size of project. Back then, the Americans thought there was no one here who could make movies. They brought 150 people with them. That’s completely changed. Now, they don’t need to bring anyone.

How is this year shaping up? What productions do you have in the pipeline?

Winter is traditionally a downtime for us, when we do preproduction unless there’s a film, like Bridge of Spies, that wants the cold Berlin weather. Right now we’ve got a few projects set to shoot in March and April, and we’re in talks on several more. I can’t name names, but we expect to have a very good year.

Interview edited for length and clarity.