Entertainment investors Todd Wagner and Mark Cuban have acquired the Landmark Theaters arthouse circuit from Oaktree Capital for roughly $80 million.
Contrary to an initial report, current management will remain in place at the circuit for the foreseeable future under CEO Paul Richardson.
Execs wouldn’t discuss financial details of the acquisition. But it’s understood the new owners are committed to continuing work on a major new arthouse multiplex project in westside L.A., repping at least $10 million to $15 million in build-out commitments.
Purchase of the 185-screen arthouse circuit is seen as a strategic investment for Wagner and Cuban, dovetailing with their interest in artfilms and independent film production. The pair operate 2929 Prods., and other film investments include a sizeable minority stake in Magnolia Pictures, an indie film distrib that owns three arthouses.
Wagner and Cuban began their entertainment investing after selling Broadcast.com for $5.7 billion in 1999. Cuban is also majority owner of pro basketball’s Dallas Mavericks.
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Ever since, their names have often circulated separately or together as prospective buyers of various entertainment assets. The pair recently circled Artisan Entertainment, which has been conducting a company auction, but ultimately decided against pursuing that acquisition.
Wagner was particularly hands-on in the Landmark transaction, in which he was the lead investor through the partners’ 2929 Entertainment holding company. The duo split their investing activities, with Wagner focusing mostly on film-side investments and Cuban overseeing their HDNet web and related ventures.
“2929 Entertainment is now able to expand our development and acquisition efforts and create a vertical industry presence,” Wagner said
2929 films includes Robert DeNiro starrer “Godsend,” which Lions Gate will distribute, and Section 8 co-prod “Criminal,” set for Warner Bros. distribbing. Their other entertainment investments include last year’s purchase of the Rysher Entertainment film catalog.
J.P. Morgan, which financed the Rysher acquisition, is expected ultimately to finance the Landmark acquisition. Wagner and Cuban dipped into their considerably deep pockets to fund the initial purchase so a preliminary agreement could be inked on Friday, according to sources close to the transaction.
Final closing on the deal is subject to regulatory review, which is expected to take about a month. Salem Partners advised Wagner and Cuban on the Landmark acquisition.
Landmark was founded in 1974. The movie chain was acquired in 1998 by the former Silver Cinemas, which sold Landmark under bankruptcy court supervision in May 2001 to L.A. buyout firm Oaktree Capital for about $40 million.
Prior to Oaktree’s sale to 2929, the firm had initially agreed to Landmark’s acquisition by Canadian conglom Onex, which operates the Loews Cineplex circuit. But Onex pulled out of that deal during U.S. regulatory review.
Along with Richardson, Landmarks’ other top execs are also expected to continue in their posts. Those include exec veep/film buyer Bert Manzari and VP marketing Ray Price.
“We don’t want to mess with anything that Paul and Bert have built up,” Wagner stressed. “But the part that we’re very upfront about is that we’re vertically integrated now, (and) to me that was the one missing thing at Landmark.”
Pics produced by 2929 might not be limited to Landmark screens exclusively, but the ready availability of such infrastructure would be an operating advantage to both the circuit and the production company, Wagner said. Similarly, HDNet will provide a ready cable-TV window for 2929 films, he added.
(Gabriel Snyder contributed to this report.)