They Have the Warner Bros. Deal, Now What Will Paramount Do with It?

With the Paramount-Warner Bros deal all but done, the question now is what a Warner Bros. under Paramount leadership deal will mean. That’s the question Blake & Wang P.A. see entertainment attorney Los Angeles, Brandon Blake is here to answer today.

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Brandon Blake

Lofty Promises

We’ve seen promises of 30 movie releases a year, and a merger ahead for HBO Max and Paramount+. Add to that a promise to keep the linear cable channels pumping, and $6B in savings to come, without major labor cuts. Then, add committed theatrical windows, and wrap it all up in a promise to revitalize the Warner Bros business. Oh yes, Warner Bros will also be remaining independent, for the most part.

That’s certainly pretty much a tick-for-tick list of what the industry wanted to hear about Warner Bros. future. How realistic it is, however, is another question.

The Studio That Can’t Find (the Right) Owner

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Warner Bros has done fantastically at the box office in recent years. But it’s still become known at least as much for its many changes of ownership. Neither Discovery nor AT&T could make it work.

And Paramount will be going into this deal with $79B of their own debt, with only $6B in cost-saving accounted for. Whether they can really shape the needed savings to make all this work without impacting labor or production, as they claim, we will have to wait and see.

It would also be unprecedented. Especially given how many of Warner Bros. assets, which Paramount will be taking over in full, duplicate their own. Think 2 production studios, 2 news networks, 2 marketing departments, 2 major SVOD platforms. It’s a long list. One that makes these promises seem unlikely at best.

Is this a sign of real vision from Paramount? Or just some wishful thinking? We shall have to see what comes as reality sets in.

Department M May Buy a Stake in Neon – But Who Are They?

While we have known that Neon was exploring a sale or new funding for a major stake in the company for a while, many may be surprised by who is at the front of the queue to take that stake: Department M. As that likely doesn’t mean much to anyone but the most dedicated film connoisseur, we have an entertainment lawyer Los Angeles at Blake & Wang P.A., Brandon Blake, to fill in the full story.

Brandon Blake

Neon Expansion

Currently, Neon is one of the biggest players in domestic specialty offerings, and they have been a major buyer at almost every post-pandemic film festival to date, including 6 consecutive Palme d’Or winners.

It’s currently unclear exactly how large the stake in Neon that is up for grabs really is. However, it is currently backed by a private investment consortium about which few people have any real knowledge. And Neon is playing the (potential) deal close to its chest, with no official statement on the matter.

Who is Department M?

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Department M is a production company founded just over 2 years ago and led by Mike Larocca and Michael Schaefer. Larocca was the president and co-founder of the production banner fronted by the Avengers directors, AGBO. Schaefer moved to Department M from his former role at New Regency.

You may recognize some of their titles, of which The Christophers, to be released by Neon, is the latest. Neon picked up the title at last year’s TIFF. They were also responsible for The Hand That Rocks the Cradle’s recent remake, and the Jo Nesbø novel adaptation, Blood on the Snow.

We last heard news of a potential sale for Neon in 2022, but the deal fell through. With a couple more Oscar nominations and wins under their belt, and the mass commercial success of Longlegs to boot, Neon is currently a hot property, but recently had something of a brain drain, which may be why they are looking for new partnerships in the first place.

China Sees a Massive Box Office Uptick

For Chinese cinemagoers, this was the year of the major blockbuster. With both a local and a Hollywood release performing remarkably, they’ve seen a big increase at the box office by pure numbers, but a struggling mid-tier segment does raise some questions about growth overall. We have a full roundup from expert entertainment attorney with Blake & Wang P.A., Brandon Blake.

Brandon Blake

Top-Heavy Success

First, the good news. Ne Zha 2, a domestic breakout like no other, closed with $2.1B in takings, enough to make it the fifth-highest earning movie of all time, as well as the year’s undisputed top film. To further pad out the numbers, Zootopia 2 not only earned itself a Chinese screening but gave a further $558.3M to the total box office. Overall, the Chinese box office saw ticket revenue 20% higher than last year, at roughly $7.41B in sales and 1.24B in admissions.

The Year of Animation

What unites them? They’re both blockbuster-level animations. And, looking further down the list, 57 animated features brought in $3.57B, almost half the year’s total. What’s even more notable is that most of these titles saw fan-favorite status and high repeat viewings, with Nobody, a local animation, bringing in $245M and the international release, Demon Slayer: Infinity Castle, accounting for $95.6M despite an early exit from theaters.

While local titles still accounted for roughly 80% of the Chinese market, and there was encouraging growth in the country’s still-maturing suburban and regional markets, it is notable that most of the list is top-heavy, with mid-tier films shrinking notably for another year, even among Hollywood releases in the market. However, the appetite for locally-made films is still high.

What this could mean for the market overall waits to be seen, but China’s return to the second-largest global film market, at 24% of the global box office, is still to be celebrated.

Japanese-Based Indie Film Financier Wins New State Support

The Japanese film industry to date has been characterized as conservative, partly held back by a dated film financing system. However, with the news that The Development Bank of Japan has made investment into K2 pictures, one of their most notable indie film financiers, that could be set to change. Blake & Wang P.A. entertainment attorney Los Angeles, USA, Brandon Blake, looks at what this could mean for Japanese indies.
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Brandon Blake

New Film Production Fund

Tokyo-based K2 Pictures is looking to launch a new production fund. So far, so regular business. What’s new, however, is the interest from The Development Bank of Japan, or DBJ. It seems there’s growing institutional confidence not only in K2 itself, but also the chances of shaking up Japan’s rather stagnant film financing framework.

DBJ will be investing 500 million yen, about $3.3M, in the new fund. Locally, it’s been called an “unprecedented show of support” for local independent film, especially with a strong list of blue-chip companies adding even modest amounts to the fund.

A Shift in Thinking

It seems that Japan’s most conservative sector of all- finance- is starting to see K2’s support of independent filmmaking as a viable approach. It’s an interesting development, given local cinema is dominated by careful franchises and the odd anime blockbuster. This leads to co-financing models headed by full studio consortia, with an added dash of broadcasters and publishers.

In short, something that not only makes it difficult for smaller filmmakers to compete but is also widely believed to stifle creative autonomy. K2 instead uses a profit-sharing model. This helps to lower the middlemen fees considerably, in turn making financing and production incentives (slightly) easier to access.

From its inception, announced at the 2024 Cannes, K2 has also managed to attract some of Japan’s most influential filmmakers, with names even the West will easily recognize, and also onboarded one of the country’s anime powerhouses. This will be one for independent filmmakers to watch.

Lionsgate Enters Digital Movies with New Launch

After parting ways with Starz and, by default, their largest streaming platform, Lionsgate is back, with a new digital movie network on offer. You could review entertainment lawyer at Blake & Wang P.A., Brandon Blake, fills us in on the details below
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Brandon Blake

DirecTV Debut

The new all-movie digital network will be used to give its extensive 20,000+ title library some extra (and lucrative) airtime. To be called MovieSphere Gold, it will see its debut on DirecTV, Sling Freestream, Friendly, and DishTV, with several other hosts lined up. To no one’s surprise, given the shifts in the streaming environment, it will be an ad-supported subscription service.

While there are plenty of movies on offer across the varied modern streaming sources, this will be the first dedicated solely to movie titles. Plus, of course, the fact that many of Lionsgate’s catalogue are not currently available through other streamers.

An Answer to Broadcasting?

Interestingly, with the recent spin-off of Starz and its linear assets, it seems that Lionsgate Studios is looking to replicate the TV broadcast model that worked so well for them, with a modern streaming twist to reinvent it. It’s not a bad bet, with digital broadcasting in this vein showing steady growth and even a little expansion. As the CEO noted, there are now 8 “diginets” using a similar setup among the Top 50 entertainment networks.

With the Lionsgate reputation and catalog to back it, MovieSphere Gold is an interesting exercise in reinventing old strategies. While they have no plans at present to move fully into a streaming platform framework, despite some solid TV assets under their belt as well, the remaining question is now how much subscriber uptake they will receive, as North American viewers become ever top-heavier on subscriptions. Will Lionsgate’s pull be enough to make it a success? Let’s hope to see it thrive.