Lionsgate has picked up a 20 percent stake in the Spyglass Media Group, while also nabbing around 200 titles, or most of the feature film library belonging to Spyglass.
Terms of the deal were not disclosed, but Lionsgate, always a subject of M&A chatter as digital titans like Facebook, Apple and Amazon muscle into Hollywood, said it has taken an investment stake in Spyglass. Former MGM chief Gary Barber will continue to lead Spyglass as its chairman and CEO, and the studio’s senior leadership team will remain in their current roles.
The major assets held by Spyglass include the latest installment of the Scream blockbuster horror franchise set for a Jan. 14, 2022; the movie The Upside; the TV fashion competition series Project Runway; and the revival of the Hellraiser franchise, currently in preproduction.
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The agreement includes a multiyear first-look TV deal between Lionsgate Television and Spyglass. The library film titles acquired by Lionsgate include Fruitvale Station, The King’s Speech, Scream 4, Scary Movie 5, Spy Kids 4, Paddington, Silver Linings Playbook, Lee Daniels’ The Butler and Quentin Tarantino titles like Django Unchained, Inglourious Basterds and The Hateful Eight.
Those movie titles will be put to use as Lionsgate continues to drive into the streaming space with Starz. The 200-title Spyglass library will be added to Lionsgate’s existing 17,000 film and TV titles as the studio looks to exploit its library acquisitions as with earlier deals for Artisan, Trimark and Summit Entertainment.
“This agreement continues to grow our valuable portfolio of IP while partnering us with Gary Barber, one of the leading entrepreneurs and content creators in the business,” said Lionsgate CEO Jon Feltheimer in a statement. As the studio gets into business with Spyglass and Barber, Lionsgate will look to jointly create content.
The studio taking a stake in Spyglass Media comes as industry consolidation gathers pace, including after a $43 billion deal for AT&T to merge WarnerMedia with Discovery to create a global streaming giant and Amazon picking up MGM, leaving Lionsgate likely in the hunt for possible mergers and acqusitions of its own.
“It is a win/win deal that creates significant incremental value for both companies while continuing to add to our global content distribution platform at a time when the demand for premium content is greater than ever,” Feltheimer added.
“I am grateful for the steadfast support from our strategic investors and am thrilled to align with Jon Feltheimer, Michael Burns and all our partners at Lionsgate as we look forward to expanding our relationship in creating great content and exploring strategic opportunities together in the marketplace,” said Barber in his own statement.
In 2019, Barber took control of the film and TV assets that Lantern Entertainment acquired in a 2018 Weinstein Co. bankruptcy through a new partnership called Spyglass Media Group. The former MGM chief headed up the development, finance and production company as a partnership in which Lantern Entertainment co-presidents Andy Mitchell and Milos Brajovic, then coming into Hollywood as showbiz novices, became majority investors.
Texas-based private-equity investors Mitchell and Brajovic picked up the Weinstein Co. assets, which included a handful of unreleased movies and a library of about 270 films, for $289 million.
“Two years ago, we were excited to team up with Gary and have him do what he does best — build Spyglass Media Group into a global premium content company and, in short order, increase shareholder value. Once again, he successfully exceeded those challenges, and we are delighted to continue the journey with him,” said Spyglass’ strategic investors in a joint statement.
They include Mitchell, founder, CEO and managing partner of Lantern Capital Partners; Toby Emmerich, chairman, Warner Bros. Pictures Group; Tarak Ben Ammar, chairman of Eagle Pictures; and Mooky Greidinger, CEO of Cineworld Group.
The transaction was negotiated for Lionsgate by a team headed by Lionsgate COO Brian Goldsmith and Lionsgate executive vp and general counsel Corii Berg, with Sheppard Mullin LLP acting as legal adviser. The transaction was negotiated for Spyglass by a team headed by chief legal officer Cheryl Rodman, with Moelis & Company LLC serving as the exclusive financial advisor and Venable LLP acting as a legal advisor for Spyglass Media Group.
