"Hustlers" Courtesy of STX Films
The parent company of indie film and TV studio STX is shopping its film library rights in order to pay off debt of roughly $150 million and infuse the company with cash, a Wednesday regulatory filing said.
ErosSTX, which owns the producer of films like “Hustlers” and “Greenland,” revealed it had “entered into an exclusive negotiation period with a third party to monetize the revenue from 46 films in its library.” While the third party is unknown, the company is exclusively shopping the library revenue stream and will retain derivative and ancillary rights, allowing STX to develop remakes and sequels based on its existing IP.
Run by CEO Robert Simonds, STX’s library sale would resolve $150.1 million owed to a revolving credit facility from JP Morgan and $22 million in mezzanine credit. The potential transaction would exceed the debt and add cash to STX’s balance sheet, sources said.
In a media landscape rife with consolidation, even lean film libraries are considered formidable assets. STX’s willingness to part with ownership of theirs — which also includes films “Bad Moms” and “Poms” — is part of a strategy to make the company nimbler in an aggressive sellers market, another source noted. The insider downplayed any liquidity issues, and suggested that the resulting revenue would add headcount to the company in areas like marketing and potentially business affairs, as well as increase production and output.
Despite the hammering that the entertainment sector took from the pandemic, STX has arguably had its best 18 months in terms of product and revenue. Following a brutal 2019 and millions in material losses from the failed franchise starter “Ugly Dolls,” the company rebounded with Jennifer Lopez’s awards-bait drama “Hustlers” and produced Gerard Butler’s “Greenland,” a top PVOD earner.
They also sold the Kristen Bell comedy “Queenpins” to Paramount Plus at a reported $10 million-plus profit, marked over a year with Amazon Prime Video for a European output deal and landed the splashy action packaged “Fast & Loose” with Will Smith and director David Leitch. Like many indie players with wide theatrical distribution mechanisms, the operation has fared better selling off content to starved tech players amid COVID-19.
The library sale is expected to close by the end of September, noted an individual familiar with the discussions.
Variety's Matt Donnelly contributed to this post.
https://variety.com/2021/film/news/stx-film-library-debt-greenland-1235035940/
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