Cinedigm Takes Minority Position in Shout! Factory

Cinedigm has taken a minority interest in Shout! Factory, the two companies said Thursday.

Terms of the deal were not disclosed, but individuals with knowledge of the talks peg the investment at under $5 million.

As part of the deal, the partners plan to relaunch Shout’s existing over-the-top digital channel, Shout! Factory TV, which centers on classic television and movies. The deal also includes an extension on Cinedigm’s current pact to distribute Shout! Factory titles on home entertainment platforms. Shout! Factory specializes in delivering nostalgia entertainment and packaging boxed sets of shows such as “Freaks & Geeks,” “My Little Pony” and “Power Rangers,” along with works from directors such as Roger Corman.

In an interview with Variety, Cinedigm CEO Chris McGurk said there were lots of opportunities to cross-promote their over-the-top channels. Cinedigm has two active channels: Docurama, which curates documentaries, and ConTV, a Comic-Con branded property. A third channel, Dove, is scheduled to launch later this year with an eye toward faith-based audiences.

A broader network will allow Cinedigm and Shout! Factory to build a bigger audience and bolster their ad rates.

“They do a great job in marketing and promoting and curating content,” said McGurk. “They’ve been able to grow this business and achieve a bond with customers.”

Bob Emmer, COO of Shout! Factory, said that there are opportunities for the two companies to partner on additional channels and projects going forward. “The borders and boundaries of the deal can be expanded as we both see fit,” said Emmer.

The announcement comes on the heels of a Bloomberg report last week that Cinedigm tapped Evolution Media Capital to evaluate takeover opportunities. Sources confirm a Deadline report that Cinedigm had weighed a possible pairing with Relativity, but won’t proceed until the studio resolves its financial issues. Relativity is trying to get an extension on a massive debt payment that is due this week.

Shares of Cinedigm were trading at 80 cents mid-day on Thursday. Shout! Factory is a privately held company.

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