STX Remains Independent Studio, Divorces Eros, Reaches Deal With Najafi – Deadline

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EXCLUSIVE: There have been a lot of biting rumors around STX Entertainment over the past four months, from a potential sale to Lionsgate to possibly the Chapter 11 filing. Hustlers and bad moms studio can now breathe a sigh of relief, having fully completed its sale to The Najafi Companies, with Birch Grove LP and 777 Partners now also providing financing.

The Forest Road Company was originally part of the Najafi consortium to take over debt from STX, but it is no longer part of the revived studio going forward.

All of this puts STX Entertainment in a position to remain independent, now completely separate from Eros International, which we’ve heard has its own financial baggage, further complicating the Burbank studio’s affairs. This is all good for the larger independent film ecosphere, as STX will not be a theatrical distributor to bite the dust in an industry still obsessed with streaming as the pandemic abates.

Robert Simonds will be president of STX, and currently president Noah Fogelson will become the new CEO. Adam Fogelson will continue as Chairman of Motion Picture Group, Andrew Warren will continue as Chief Financial Officer and John Friedberg will continue to oversee the international divisions and acquisitions of Motion Picture Group from the company’s London office.

Friday’s transaction positions STX to continue to develop, market and distribute content globally through multiple distribution channels, including theatrical releases, international and direct-to-home services, and home video. Requirement. STX is moving away from what was originally intended as 12 theatrical releases per year. The studio now plans 15 films per year, five of which are destined for the big screen and the balance split between PVOD titles directly streaming or distributed theatrically internationally or live-action titles.

Like other studios, STX has pivoted during the pandemic, with hybrid theatrical releases or lucrative direct-to-streaming licenses. STX sent Greenland to the US PVOD, skipped the theater (when New York and Los Angeles theaters were closed), and sold streaming to HBO Max on this Gerard Butler film in the summer of 2020. He authorized what was to be a theatrical release, my spy, at Amazon. He managed Mauritanian, which won a Golden Globe.

Recently, STX sold The contractor to Showtime and Queenpins to Paramount+. STX expanded into television with the launch of the reality show Boy’s Island on HBO Max.

“At a time when the demand for global content has never been greater, we are thrilled at this rare opportunity to acquire STX Entertainment, one of the only remaining independent studios,” said Jahm Najafi, Founder and CEO of The Najafi Companies. “As investors, we have a long-term view and believe in the power of storytelling and in fostering a storyteller-friendly studio. We have the utmost respect for this 100+ year old ecosystem, and we look forward to supporting this partnership and the way modern entertainment studios evolve in the future.

Says Simonds: “The conclusion of this agreement signifies STX’s leadership position and its hopeful future within the film and television industry. We are thrilled to work alongside this well-respected investment firm and are grateful for their continued support as we grow our library of star-driven content. We’ve cemented our international reputation and notable ambitions so far, and we look forward to continuing to prove ourselves with every project we take forward.

Added Noah Fogelson, “In a relatively short time, STX has helped create and distribute over 70 films, many with stars and filmmakers who have done multiple projects with us. Since The Gift, Bad Moms and Hustlers for The Upside, Molly’s Game, Greenland and to come Operation Fortune, the studio has, despite many headwinds, cemented a place in the industry. We are delighted that such a savvy investor as Jahm [Najafi] and The Najafi Companies see the value of the platform today, and also what is possible tomorrow.

It was announced in December that STX was being acquired by Phoenix-based Najafi’s company for $173 million, followed by a 45-day “go-shop” period during which STX could present offers from other suitors; that’s when Lionsgate’s offer was considered. This agreement, we understand, involved not only the absorption of the library, but also the staff of STX. Lionsgate offered a price that STX deemed too low to offer to its board.

Reorganizing its finances lately, STX has put two films out of business under shell companies to protect the titles: Greenland 2 and the movie Chris Pine-Ben Foster The contractor. While the Service provider was sold to Showtime for around $15 million and more, the photo’s financier, 30West, filed a lawsuit in a U.S. bankruptcy court in New Orleans, seeking the dismissal of the Chapter 11 case and claiming that STX failed to make $8.4 million in contract payments. The bankruptcy filing automatically barred 30West from terminating its defaulting agreement with STX. 30West was looking to terminate its contract and reclaim the film.

Last week, Deadline reported that STX had made cuts to lower executive levels as well as marketing and distribution as it changed its model. Given today’s announcement, STX should be in a better position to reconcile all of the above dilemmas; we heard he was even hiring.

The Najafi Companies is an entrepreneurial-focused private investment firm with significant holdings in consumer brands, media, e-commerce, sports and technology.


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