A24 recently explored a possible sale, with the indie film studio floating an asking price of between $2.5 billion to $3 billion.
Sources familiar with the situation tell Variety that the Oscar-winning shop behind “Moonlight” and “Uncut Gems” has engaged with numerous potential suitors for more than 18 months. It’s unclear if those discussions continue to be ongoing. Sources close to A24 said the company is focused on expansion and is not prioritizing a sale.
Initially, the $2.5 billion-plus price tag drew some skepticism, but the media landscape has changed dramatically in just the past 12 months.
Amazon has set a deal to acquire MGM for $8.6 billion, a price that also seemed sky-high to industry insiders. Reese Witherspoon’s Hello Sunshine content banner has quietly begun seeking a sale or a partner in a deal that would value the company as high as $1 billion transaction. In this heady environment, the A24 auction could be robust as media and tech giants look to bulk up on as much content and IP assets as they can grab.
While one top content broker said the company founded in 2013 by Daniel Katz and David Fenkel had “hung a billion-dollar price tag around its neck,” A24 has been internally hesitant to cross the finish line and hand over the keys.
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Founded in 2012 with seed money from Guggenheim Partners, where co-founder Katz formerly led the film finance group, the company released its first feature with 2013’s “A Glimpse Inside the Mind of Charles Swan III.” That movie didn’t make much of a splash critically or commercially, but A24 rebounded with buzzy titles such as “The Spectacular Now” and “Under the Skin,” becoming a favorite landing spot for auteurs. The company has grown to the point where it has over 100 employees and maintains offices in Manhattan and Los Angeles.
Possible scenarios for a deal have included merging with standalone players or an outright absorption by a tech giant. A24’s tires were kicked by Apple, with whom it signed a multi-year film slate deal in 2018 that has yielded titles like Sofia Coppola’s “On the Rocks.” Though some sources said the Apple acquisition talks happened closer to the slate announcement, two other insiders said talks were much more recent.
A24 declined to comment. A spokesperson for Apple did not immediately respond to a request for comment.
Industry insiders wondered how a rich payout would affect the fabric of a company like A24 – one of the most clearly defined, enviable brands in the game. The company’s trademark of high-and-low brow taste, smattering of A-list collaborators, cinephile devotees and consumer awareness have earned them over two dozen Academy Award nominations. Its films read like a laundry list of some of the edgiest and most ground-breaking indie fare of the last decade, with movies that include “Spring Breakers,” ” Ex Machina” and “Lady Bird.”
This is not the first time A24 has been out in the market looking for capital and potential partnerships. Following the success of “Moonlight,” which won the Oscar in 2016 for best picture, the company engaged in a roadshow with some of the major studios, one knowledgeable source said, seeking significant financing and some form of joint venture. Talks ended quickly as A24 was unwilling to offer any equity in their business, added the source.
Five years later, A24’s competitors are pivoting to streaming in droves. The company needs more content and resources to sustain itself, said another insider. A24 has recently expanded into television with buzzy hits like HBO’s “Euphoria,” Hulu’s “Ramy,” and Netflix’s “John Mulaney & The Sack Lunch Bunch” and to more commercial films like the upcoming Dev Patel Camelot tale “The Green Knight.”
“What’s the asset?” asked one film executive, pointing to A24’s modest library, recent selloffs to digital players like Hulu (Illana Glazer’s Tribeca Film Festival player “False Positive”) and Amazon (the Val Kilmer Cannes doc “Val”). The Apple slate is not as cut and dried as it seems, added multiple people familiar with that arrangement. Sold to the town as a “put deal,” where a distributor is required to release an agreed-upon slate of films, the sources said Apple has passed on numerous titles that A24 hoped to go to Apple TV Plus subscribers.
A24 at present has a pay-one output deal for movies with with Showtime. Its streaming video-on-demand deal with Amazon Prime has recently expired, which could be attractive to tech companies looking for exclusivity for subscribers. The studio also has an established distribution mechanism for platform and wide releasing, a major Achilles heel for tech companies gobbling up film studios.
Others seemed less concerned with tangible assets, calling A24’s creative strategy the real prize.
The company’s marketing machine has dazzled Hollywood for the near decade, deftly turning unknown festival films into buzzy hipster bait — and luring filmgoers with the pop-up shop around Casey Affleck and Rooney Mara’s “A Ghost Story” which sold stark white bedsheets, or its recent vanity publishing of the book “The Story by A’Ziah King,” which bound the 150-Tweet thread behind the A24 film “Zola” into literary canon. It’s the executives behind those moves — like marketing and brand head Graham Retzik, PR veteran Nicolette Aizenberg, and the elusive founders Fenkel and Katz – that make A24 “a get,” another insider said.
Absorbing such a specific operation may come with growing pains for a corporate-governed buyer. A sale may also invite unwanted scrutiny into A24. Within the guarded walls of the company, the brand is king.
“You never hear a word about their flops, and they definitely have them,” noted one competitor. “All anyone cares about is what they’re doing next.”
Brent Lang contributed to this report.
(Pictured: HBO’s “Euphoria”)