Fledgling Studio STX Secures Investment from Malone's Liberty Global -- Update
November 30 2017 - 9:38PM
Dow Jones News
By Wayne Ma
HONG KONG -- STX Entertainment, the young Hollywood studio
behind the "Bad Moms" franchise, said Thursday it will receive an
investment from John Malone's Liberty Global PLC.
A person familiar with the matter said Liberty would invest $35
million, valuing the studio at $1.37 billion. Spokespeople for STX
and Liberty said the amount of the investment was incorrect; they
declined to elaborate.
The investment in STX comes ahead of its planned initial public
offering in Hong Kong next year, where the studio is seeking to
raise about $500 million at a valuation of $3.5 billion, The Wall
Street Journal has reported.
Liberty Global, based in London, is a sprawling international
basket of cable operators that has scooped up assets across the
world as it looks to position itself as a media and
content-distribution giant.
Mr. Malone's companies have made other content investments over
the past few years, which include Liberty Media Corp.'s acquisition
of Formula One, and an interest in another Hollywood studio, Lions
Gate Entertainment Corp. That studio acquired premium cable channel
Starz last year. Mr. Malone was the largest voting shareholder in
Starz.
Earlier this year, Liberty Global partnered with an affiliate of
U.S. private-equity firm TPG to launch a global TV production and
distribution studio. TPG is one of STX's largest investors.
STX said in a news release early Friday, Hong Kong time, that
Bruce Mann, chief programming officer at Liberty, would join its
board of directors.
Last month, STX released its second "Bad Moms" film. The sequel
has grossed more than $90 million world-wide in its first month, on
a budget of around $30 million, according to Box Office Mojo. The
original film grossed more than $180 million over its three-month
run, on a budget of $20 million.
Founded in 2014 by producer Robert Simonds and Bill McGlashan, a
top executive at TPG, STX has focused mainly on mid-budget movies
and expanded into television, virtual reality, digital video, music
and live entertainment.
STX is projected to book an operating loss of about $85 million
on revenue of about $285 million this year, a second person
familiar with the matter said. The company's operating loss is
expected to widen to about $90 million on revenue of about $755
million next year, the second person said. By 2019, STX is expected
to roughly break even on revenue of more than $1.8 billion, the
second person said.
STX's potential listing in Hong Kong is part of efforts to stay
close to its investors and audience. The studio forged early
partnerships with Chinese investors, receiving a major investment
in 2014 from Hony Capital, a Chinese private-equity firm. TPG now
owns at least a third of the studio, while Hony owns at least a
quarter of it, the first person said.
Huayi Bros. Media Corp., China's leading film studio, committed
several hundred million dollars to help finance STX's movies for
three years starting in 2015.
In 2016, Chinese internet giant Tencent Holdings Ltd. and a unit
of Hong Kong-based telecom and media company PCCW Ltd. bought
stakes in STX for undisclosed sums. The size of those stakes are
each less than 5%, the first person added.
Write to Wayne Ma at wayne.ma@wsj.com
(END) Dow Jones Newswires
November 30, 2017 21:23 ET (02:23 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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