A24 Exploring Sale Upwards of $3B

[Porthos]

28 minutes ago, grey ghost said:

What a rip off.

 

Disney bought Marvel for 4 billion.

 

You can't make multi-billion dollar franchises and theme parks based on Moonlight and Ladybird. In fact, there's not much more money to be made from those movies. Well not compared to Marvel and Star Wars films.

 

This was brought up with Lucasfilm as well.

 

I don't think one can really compare studio purchases made in the Aughts/Early New Teens (Marvel: 2009 | Lucasfilm 2012) with studio purchases now.  It's a completely different environment.

 

(also, Lucas didn't put up Lucasfilm to open bidding; he sold LFL to Disney because he felt that was the best outfit to run the company)

 

Right now there is a tremendous appetite for both content and back catalogue so folks can fill out their streaming services.  That same appetite applies to making new content for said streaming services.

 

Is 3b an overpay?  Of course.  1b is probably an overpay.  Then again, when Lucasfilm was sold, it hadn't made anything of note in nearly seven years, aside from an animated TV series that had something of a cult following and was on life support.  When Marvel was sold, while it was healthy on the comic book front, it's latest entry into filmdom was the smash hit The Incredible Hulk

 

*rereads card*

 

Huh.

 

Anyway, yes broadly speaking If Marvel was worth 4b in 2009 then of course A24 isn't worth close to 3b.  But Marvel wasn't ***MARVEL*** in 2009 and the entertainment landscape is very different now when it comes to folks chasing dollars.  Something we should remember when we try to pull out Marvel and Lucasfilm were each worth 4b when they were purchased card, as the is literally no way in hell either of them would go for 4b today if they were somehow up for sale.

[Jamiem]

18 minutes ago, Porthos said:

Is 3b an overpay?  Of course.  1b is probably an overpay.  Then again, when Lucasfilm was sold, it hadn't made anything of note in nearly seven years, aside from an animated TV series that had something of a cult following and was on life support.  When Marvel was sold, while it was healthy on the comic book front, it's latest entry into filmdom was the smash hit The Incredible Hulk

But even so the purchase of Lucasfilm came with the announcement of a new Star Wars trilogy, while merchandise and ILM (and the rest of the tech side) were a huge get. It also paid off for Disney and they have very likely already made that money back on that investment. 

 

I think we can compare these even under a different just because of how weak the gains for a company acquiring these smaller studios is and also the fact that Big Tech can overpay as we've seen with Amazon and is rumoured as a possibility with Apple.

 

Hell even just looking at past acquisitions from Amazon and Apple. Amazon paid $1B for Twitch in 2014 and is in the process of paying what 8x that for MGM which is insane. Apple paid $3B for Beats which they used to make their Apple Music streaming service and had a huge hardware business and they are looking at spending $1B on Hello Sunshine. 

 

These are not just just overpaying but doing so egregiously, but I guess that's the benefit of having tens or hundreds of billions of cash on hand and seeing anything under $10B as a rounding error (if you couldn't tell by now I'm not a huge fan of Big Tech buying everything)

 

Of course on the other side of things a very good outcome for MGM as they had a tough road ahead anyway with a good possibility they may have gone bankrupt in the future. It's a sellers market and I can understand other smaller studios trying to make the most of out of it. 

[Porthos]

53 minutes ago, Jamiem said:

But even so the purchase of Lucasfilm came with the announcement of a new Star Wars trilogy, while merchandise and ILM (and the rest of the tech side) were a huge get. It also paid off for Disney and they have very likely already made that money back on that investment. 

 

There is that.  But I was trying to highlight that the actual studio end of LFL was in a pretty YIKES state (so much so that as I understand it, one of the reasons why TFA was a co-production with Bad Robot is because LFL was in no shape to actually make a major tentpole on its own).

 

Now contra to my last point, and I did kind of allude to this in my pervious post, if Lucas had actually put up LFL for open bidding, he probably would have received much more than the 4b he ended up selling for. And if insanity gripped Disney and they put up LFL for sale tomorrow it'd get faaaaaaaaaar more than 4b (presuming all the rights transferred), even without taking into account that this is a sellers market thanks to streaming. 

 

That's why I find the argument "Well, Lucasfilm sold for 4b" a bit lacking. Lucasfilm was a bargain in 2012.  The point I was trying (and perhaps not succeeding) to make when it comes to SW and Marvel is that they are far healthier now than they were then and worth more now than then.  I suppose I am saying folks should recalibrate to what Marvel and Lucasfilm were in 2009 and 2012 and not what they are now when they think about the 4b price tags (which was almost certainly an underpay in the first place when it came to LFL).

 

Not that A24 isn't asking for the moon and beyond here.  Just that I don't see the comparisons with Marvel or Lucasfilm to be particularly apt for those two separate reasons.

 

53 minutes ago, Jamiem said:

I think we can compare these even under a different just because of how weak the gains for a company acquiring these smaller studios is and also the fact that Big Tech can overpay as we've seen with Amazon and is rumoured as a possibility with Apple.

 

Hell even just looking at past acquisitions from Amazon and Apple. Amazon paid $1B for Twitch in 2014 and is in the process of paying what 8x that for MGM which is insane. Apple paid $3B for Beats which they used to make their Apple Music streaming service and had a huge hardware business and they are looking at spending $1B on Hello Sunshine. 

 

This, however, is a better argument, IMO.  Especially the Beats one (which might be the closest analogy yet to A24 and AppleTV) Then again, as you note, this is all pocket change to a company like Apple.

 

(note, I also agree with you when it comes to Big Tech spending money like drunken sailors, but that's a somewhat separate argument) 

 

I do have other concerns about the sustainability of excess spending for acquiring studios (corps regretting hideous overpays for studios isn't exactly an unheard of phenomenon) as I have grave doubts about stability of streaming in the first place outside of the Big Boys in the field.  But if Apple wants to light a gigantic pile of money on fire in an attempt to keep pace with the Big Boys in the world of streaming?  Well they're one of the few corps that can actually probably do that and not worry about the long term health of their company by doing so.

 

(which is, as you alluded to, a concern in and of itself)  

 

[eddyxx]

This topic ain’t even moved past 3 pages, so how they think they’re worth 3 billion?😏

Edited July 17, 2021 by eddyxx

[Walt Disney]

The thing about a potential A24 sale is that the studio does not have a big back catalogue, so it is not really worth a lot. Forget about the Marvel and Lucasfilm sales to Disney. Look at the Dreamworks Animation sale to Universal. Dreamworks Animation had a  bigger back catalogue and was making higher grossing films.

 

The MGM sale to Amazon (which is still pending) was a clear over-bid, but MGM has a big catalogue post May-86 films, UA films, and Orion’s film catalogue. MGM has real value. 
 

A24 does not bring enough value to the table to justify its price tag. 

Edited July 19, 2021 by Walt Disney