In 1986, Joseph Toufik Merhi and Richard Joseph Pepin, indie film directors and producers, founded the production company City Lights Entertainment with Ronald L. Gilchrist for their first movies, the comedy Hollywood In Trouble and slasher film Mayhem.

[6] The first film produced by PM Entertainment was L.A. Heat directed by Merhi and starring Lawrence Hilton-Jacobs and Jim Brown.

During the '90s, PM Entertainment had success within the kickboxing and martial arts genre and championed Cynthia Rothrock and Don "The Dragon" Wilson in multiple film projects.

Following the success of L.A. Heat, PM developed a second TV series, Hollywood Safari, which acted as a continuation of their 1997 film of the same name with Ted Jan Roberts reprising his role as Josh Johnson and was joined by Sam J. Jones playing his father, Troy.

In 1997, PM Entertainment decided that they wanted to double its own facilities on Sun Valley, in order to move to a nearly 15-acre site.

[12] CineTel Films was brought in to market the library of PM Entertainment and sell rights for upcoming productions Con Express and Lost Treasure with Stephen Baldwin.