As momentum builds for mid-2022 deal closure, the IRS has returned a favorable ruling for the AT&T-driven merger of Discovery and WarnerMedia. The Entertainment lawyer Brandon Blake has the news for us.

Tax-free for stockholders

Surprisingly for what can only be called a mega-merger, the road to date seems to have been free of significant roadblocks for the deal. The merger is currently set to go ahead under the terms of a Reverse Morris Trust. This rare structure helps to ensure deals are tax-free for most intents and purposes. 

There’s two paths open to AT&T at present, with confirmation of which will be used to be confirmed as we draw closer to the final date. Either way, it will create the temporary entity to be known as SpinCo, after which the merger with Discovery will take place.

Reverse Morris Trust

In order to allow for the tax benefits of the deal, the shareholders from the divesting company (AT&T) must retain a majority in the merged firm, in order to prove there was (technically) no capital gains to tax to the IRS. In this specific case, 71% will be retained and 7 board members named, with Discovery stakeholders holding the other 29% and 6 shareholders. This does seem odd, given that both of the current Discovery top team will remain in place to lead the new entity. This will leave the stockholders free of tax for U.S federal income tax purposes, unless they take cash over fractional shares.  

As of December 28th, 2021, they have received a favorable private letter ruling from the IRS regarding this and other intended tax treatments for the split and merger, leaving it on track for the mid-2022 deadline suggested. Blake & Wang P.A will be watching further developments with interest as we accelerate to that date.

AMC, perhaps the biggest ‘come back’ story of 2021, is moving to broaden its control over the domestic exhibition industry while its stock is still riding high. We asked Brandon Blake, our resident theater connoisseur and entertainment attorney at Blake & Wang P.A, for further details.

Pacific and ArcLight Leases

As the country’s largest circuit, AMC announced plans to take over a long-term lease to run The Grove (Los Angeles) and The Americana at Brand (Glendale) earlier this year, both of which used to fall under the Pacific Theaters chain before it lapsed. 

It is also adding the newly rebranded ‘AMC Northridge Fashion Center’ and ‘AMC Chicago 14’ to the slate, ready to reopen in spring next year. These were previous ArcLight properties, although they are all operated by the greater Pacific/Arclight company. 

Highly-trafficked Theaters

According to AMC chair-CEO Adam Aron, all of these locations have been highly trafficked in the past, and show great potential as additional properties. The acquisitions themselves are positioned as AMC staying ‘on the offense’ in search of popular locations to further the growth of their bottom line. 

It has worked well for them to date. Both their newly-acquired ex-Pacific properties are managing to squeak into the top-10 lists for the L.A market regarding box office performance already, no mean feat in an area with over 150 competing cinemas. Both have also featured in the top 30 for the U.S overall

Additionally, we are told AMC will remain in discussion with other currently closed locations, hoping to add to the stable. The iconic Cinerama Dome in Hollywood, however, will be reopened by the Pacific/Arclight parent company, Decurion Corporation, during the course of next year.

AMC seems keen to capitalize on the lifeline extended to them earlier this year, and so far it appears to be paying off. It’s a situation we will keep an interested eye on going forward.

Yes, here to come with the new sequel of the Marvel Studio. 

The newly released movie Spiderman: No Way Home starts exactly from the same spot where Spiderman: Far From Home ended.

The exposed face of the spiderman was not that loveable as the Mysterio guy framed him for his murder. I also got shocked by what the hell just Marvel did with innocent PETER  PARKER. Well, that was the rough start because the movie Spiderman: No Way Home is not a stand-alone movie. 

 Marvel Studio shall surely give its audience more shocks with their new upcoming sequels which I shall disclose with ya folks in near future.

 Back to the line, When Peter’s identity was just exposed to the whole world and the public hero got unmasked.  All turn to be his foe. Paker, his GF, and his bestie got into a huge mess. Parker, Mj, and Ned head towards MIT altogether, being extra smart but MIT rejects their proposal because of the negative feedback received from the public.

Then Peter gave a visit to Dr.Strange where he asked for help………………..

All over, the movie was a cinematic masterpiece that gave me so much remembrance. It cannot be expressed how much I enjoyed the movie thoroughly.

Tom Holland, made me say that it was incredible. He really nailed the role. All the others were also amazing as they played such a unique spiderman role.

Tobey Maguire and Andrew Garfield were fantastic, they acted the best in their supporting roles. All the rumors were true that Andrew and Tobey would be in this movie. And when the trilogy spiders came to the screen all the audience went wild. It was a mind-blowing moment.

That scene when Dr.Strange fought, it felt so realistic. And I forgot to tell you that Venom was there too all the time. He did nothing special but drink.

Find out for yourself……. What does venom do?

While official statements have been slim on the ground, it does look like most major production studios are returning to exclusive theatrical releases for their 2022 slate. Now it seems Sony has committed to the same. Entertainment attorney with Blake & Wang P.A, and well-known industry expert, Brandon Blake has a little more for us.

2022 ‘top-tier’ films will have theatrical releases

Despite the growing concerns over the Omicron Variant, Sony’s Tony Vinciquerra is now on record as stating that their ‘top-tier’ IPs and movie slate for 2022 will remain with a theatrical-only release at first, rather than return to hybrid schedules. This included mention of both Spiderman and the Jumanji franchise. While there was no focus on intended exclusive windows, it’s reasonable to assume that the near-standard 45-day release could be possible, or at least the 31-day release window we’ve seen used recently. 

Among mentions of the commitment to theaters and other invested parties, increased piracy on digital platforms was mentioned as a driving factor of the wholescale return to theaters. Despite this commitment to theatrical releases for their 15 key 2022 titles, he did mention that they were not viewing the current release schedule as anything but tentative, reiterating a willingness to move films as seems best under current conditions and bearing the global health crisis in mind. 
Producing for Netflix
It’s worth remembering, of course, that Netflix and Sony now have a pay one deal active in which some Sony films are also being developed to debut on Netflix. What Netflix chooses to do with them, as it expands its theatrical rollouts, will be interesting. It’s also noteworthy that a large chunk, as many of 10 titles, of Sony’s upcoming films, are being developed from PlayStation titles, hoping to tie that valuable arm of their owned properties into their movie industry options. 

It looks like there will be an interesting year ahead for Sony in 2022, and the news of another studio committing to theatrical releases will no doubt be well-received industry-wide, too.

Fox News is one of the most viewed networks on traditional TV at the moment. Could we, however, be nearing the end of an era? Its parent company has said it’s prepared to move to stream should the PayTV business fail to perk up in the next few months. Entertainment attorney Brandon Blake, of Blake & Wang P.A, has some more on the story. 

No Plans Yet

The move is not imminent, instead of existing as more of a threat. It’s interesting that it’s been mentioned now, however.  Fox CFO Steve Tomsic was quick to reassure us that, for now, the networks’ news and sports assets will remain with linear Pay TV. However, they’re also prepared to move into streaming if the market doesn’t pick up ‘soon’. He was quick to point to their original programming, replays of shows, and possible reboots as fodder that could power the move into a direct-to-consumer space.

Starting with Tubi

It also seems that they want to start pushing ‘sport-adjacent’ programming onto Tubi, their existing free streaming platform, but don’t yet want to move the live games off of linear TV. They do, however, have the right to do so, at least for their NFL coverage. 

For now, the sports side shores up the TV business, and they’ve made some moves into sports betting, too, with Fox Bet. It seems to be an arena they’re cautious to move too far into, however, aware of lessons from the UK and Australia. Here, sports betting content has failed to resonate with consumers and proved something of a turnoff.

While the mentions were very loose for now, the threat could be more real than we currently plan for. It’s unlikely that Fox will stay out of the more mainstream streaming market forever, right as the direct-to-consumer model is booming. Will we soon see the news network hit the streaming ‘airwaves’? The timeline remains to be seen, but that they’ve made the thread itself is telling.

Red Notice has scored itself, and Netflix, a fascinating record. This Netflix Original Movie is one that has also seen a theatrical release. A broader theatrical release, in fact, than usual. Netflix films, to date, have mostly relied on indie cinema distribution after rejection from the top 3 chains over exclusive release periods.

Yet Red Notice was among those which Cinemark also opted to carry, giving them a far wider theatrical release than normal. Yet it’s not this wider exhibition network that’s responsible for its shiny new record. That’s all on its streaming hours themselves. We asked the entertainment attorney at Blake & Wang P.A, Brandon Blake, for more. 

The most-watched movie in Netflix history

It’s nice to be able to see these figures for ourselves, too, as we’ve recently been given Netflix ‘Top 10’ lists to use for viewing data. According to those same lists, Red Notice has racked up 328.8M viewing hours overall, quite comprehensively smashing through Bird Box’s 282M previous record from 2018.

Nor does it end with subscriber hours. Red Notice has also been watched by over 50% of Netflix subscribers. It also arrived at these record-setting figures fast. It took only 18 days. Bird Box needed 4 weeks to pass the record prior to it. 

Fun adventure

Red Notice, a Netflix romp starring Ryan Reynolds, Dwayne “The Rock” Johnson, and Gal Gadot, doesn’t bring a lofty plot to the table. It’s a fun film packed with silly premise and hijinks, pairing an FBI profiler up with an art thief. But in the current glum global mood, no wonder it’s something so light-hearted that’s broken the records. We may see it push them higher, too. It still remains on the Top 10 list for over 94 countries. Quite an impressive feat!

Netflix must certainly view it as a success, given that it’s just opened for its wider theatrical release with solid success, too. We guess that sometimes just being fun really is enough.

As promised in September this year, AMC has announced it will be accepting cryptocurrency payments through its online access points for tickets and other goods. A novel development for the movie industry overall, for sure. We asked Brandon Blake, entertainment attorney at Blake & Wang P.A, for further details.

A range of cryptocurrencies

Acceptable cryptocurrencies include Litecoin and Bitcoin Cash, alongside ever-popular Bitcoin and Ethereum. This comes alongside the introduction of PayPal, Google Pay, and Apple Pay as acceptable options as well. Apparently, plans are in place to further extend the range of acceptable cryptocurrencies, with even troll-currency Dogecoin to possibly be onboarded at some point. This in itself can be seen as rather ironic, as we have the company that became the first meme stock become a leader in the push to take the original meme coin seriously. 

In the first week since the announcement, they have reportedly seen 14% of online payments use the new payment methods. While there’s no official breakdown of the numbers, we can only assume the majority of that comes from the payment services and not the crypto, which some investors see as a bit of a gimmick. Perhaps we are wrong, however.

Reinvention after the meme stock rebirth

AMC was extended a most unusual lifeline on the brink of bankruptcy last year, as an ‘army’ of day traders sent the stock soaring instead of allowing its manipulated demise. While some businesses would shy away from the ‘meme stock’ status this has earned, the AMC CEO, Adam Aron, has embraced it, even floating the notion of the company offering its own cryptocurrency and NFTs both. 

Is this unusual move a serious part of the plan to bounce back from the company’s financial problems? While that remains to be seen, it’s an interesting move, and one we will follow closely.

In the anniversary year for the first of the Lord of the Rings trilogy, perhaps it’s fitting to see Peter Jackson’s tech assets, bundled as Weta Digital, pass over to Unity Films. With an outstanding $1.6B in cash and stocks on the table, we turned to our entertainment lawyer and business expert, Brandon Blake of Blake & Wang P.A, for greater insight.

Iconic films

Weta is, of course, best known as the New Zealand vFx house that brought Lord of the Rings to life, alongside James Cameron’s Avatar, as well as some work on Shang-Chi more recently. Surprisingly, their vFx business will be separated into WetaFx, staying the course with their movie work.

Unity is best known for their gaming engine, now being widely repurposed for virtual production entertainment content, including a proprietary cloud system. With the Weta acquisition, they will acquire both proprietary tech and the 275 engineers who know it best, including unique facial capture technology, the Loki physics-simulation tools for smoke and water, and the ‘Barbershop’ hair and fur system. Prem Akkaraju, Weta Digital CEO since 2020, will remain in the post for WetaFx, with their CTO, Joe Marks, moving with the Weta Digital name under the Unity banner. 

Tech-entertainment crossover

In a time where we’re seeing more entertainment companies onboard tech assets, it’s intriguing to see the asset separation flow the other way. It’s been widely assumed that this tech acquisition by Unity will be leveraged for greater prominence in the entertainment industry, possibly beginning yet another tech giant crossover into the entertainment business through VR. In the meantime, Weta Fx will continue their work on the Avatar sequels. 

The deal is anticipated to be finalized by the end of the year, with a swift, if likely unexciting, asset handover expected. We will be watching further developments from this intriguing split with interest. 

It appears Lionsgate Entertainment is officially considering whether or not to let go of its pay-TV and streaming business (Starz), separating it entirely from its studio operations. Thursday last week we saw them complete a regulatory filing tied to their Q3 earnings regarding the separation, yet they don’t seem to have a buyer in mind- openly, at least. We reached out to a well-known entertainment lawyer with Blake and Wang P.A for more details. 

The decision was officially put to the board on Nov 2nd, 2021, and authorization to ‘explore potential capital markets alternatives’ was granted. The reasoning? It seems they would like to ‘unlock significant shareholder value’ by focusing on the two entities separately. This does seem fairly contrary to the ‘operational benefits’ we were told would be seen from their close partnership just a few years ago. Apparently, the envisioned separation will not affect this synergistic relationship, however, although it’s also currently not entirely clear how this is expected to happen in capital terms. 

Perhaps much closer to the truth, it’s also been cited that they’re not receiving equity value from the investment they’ve plowed into Starz, especially on the international front. Lionsgate acquired Starz 5 years ago, paying $4.4B at the time. Currently, Starz is set up as a pay-TV channel (as we once saw with HBO) but there is an attempt underway to increase their streaming market share, as with so many other operators currently.

While it’s clear this deal is in its early stages, and it would appear there is no buyer in mind, the situation will be worth monitoring as it progresses. It’s unusual, in what’s becoming acknowledged as the era of streaming, to see a company so keen to lose its streaming asset, so Brandon Blake and the team will be interested to see how this develops further.