×

STX Entertainment Gets Investment From China’s Tencent and PCCW

STX Entertainment has received a “significant” new investment from two Chinese media companies and several other investors — money that the company said will help it move closer to its goal of becoming a global, multi-platform media powerhouse.

China’s Tencent Holdings and Hong Kong’s PCCW both put undisclosed amounts into STX in exchange for stakes in the company, which said it intends to expand beyond its budding film business into television, digital apps, video games, social media, virtual reality, and other platforms.

One individual familiar with the deal said it values the company at nearly $1.5 billion.

Others who have tried to start multi-media companies from scratch have struggled, but STX’s founders and backers at the private equity fund TPG believe they have a route to success because of rigorous attention to cost controls, a series of partnerships with other content providers, and a determination to operate without the kind of platform “silos” that plague other media companies.

In Tencent, STX gets a partner that is a giant in China’s online products and services industry. It is China’s largest social media conglomerate. PCCW, while is less known in the West, holds interests in telecom and media, is the largest pay-TV provider in Hong Kong. The company also offers streaming content around Asia.

The two Chinese companies are just the latest to invest in STX, which has just entered the film business, with movies like “Free State of Jones” and “Bad Moms.” A previous infusion came from the private equity firm Hony Capital, while China’s Huayi Brothers has an agreement to produce 18 movies with the American partner.

STX also announced Thursday that it had received investments from Dominic Ng, CEO of Los Angeles-based East West Bank and new infusions from previous investors — Hony, TPG Growth, William Wrigley Jr., and what the announcement described as “business interests of Gigi Pritzker, Michael Pucker, and their immediate family.” The amount of the investments was not disclosed.

STX will use the new money to “expand its television and international operations, and add high-quality, full-scale capabilities across music and digital, including short-form, app-based and virtual reality/immersive entertainment.” The company claims that its “integrated, seamless storytelling platform” is unlike any other being offered in the entertainment industry.

The company has been challenged in finding winners in its first and most public endeavor so far — its film studio. It made money on the horror films “The Gift” and “The Boy,” but flopped with the Julia Roberts thriller “The Secret in Their Eyes,” the Civil War drama “Free State of Jones,” and the action film, “Hardcore Henry.” “Bad Moms,” the Mila Kunis comedy out last month, has so far bagged $61 million at the worldwide box office on a production budget reported at $20 million.

Both PCCW and Tencent entered into separate content distribution agreements with STX — PCCW receiving first-run Hollywood content for its customers and collaborating to create new programs.

“We’ve broken down the traditional silos of the entertainment business to become the best home for stars and creators to tell their stories anywhere and through any format,” said STX CEO Robert Simonds during the announcement of the new investment. He claimed his company was the only one “with the infrastructure, reach, and industry expertise to incubate, generate, and distribute content for all platforms, on a global scale.”

Janice Lee, managing director of PCCW Media Group, called the partnership a “milestone,” saying it expanded her company’s appeal to international audiences, while beefing up its offerings on pay TV and its OTT platforms in Hong Kong, Southeast Asia, and India. Martin Lau, president of Tencent, said the companies were creating “an open platform strategy to partner with media companies to create and distribute premier content globally.”

STX Entertainment Co-Founder and TPG Growth Managing Partner Bill McGlashan said the news partnership exemplified the kind of broad, multi-media approach his firm envisioned at the founding of STX. He said: “We are incredibly excited about revolutionizing the entire entertainment industry.”

STX also announced that East West’s Ng — a frequent financier on many Chinese-American deals — would join STX’s board of sirectors.

STX’s General Counsel Noah Fogelson led the deal on behalf of the company. Kirkland & Ellis LLP acted as legal advisor, and The Raine Group LLC acted as financial advisor to STX regarding the investments.

Popular on Variety

More Film

  • Mickey Mouse waves to members of

    Spider-Man, Spicer and Splashy First-Looks: Everything We're Looking For at D23

    As if Disney hasn’t owned enough weekends this year at the box office, the biennial D23 Expo will light up Anaheim, Calif. over the next three days to celebrate the content monolith. From a new Netflix-competing streaming platform to scores of movie and series reveals — along with a few hot controversies to confront — [...]

  • Angel Has Fallen

    'Angel Has Fallen' to Dominate Modest Box Office With $20 Million Weekend

    Gerard Butler and Morgan Freeman are leading the way at the North American box office with “Angel Has Fallen” on its way to about $20 million, early estimates showed Friday. Should forecasts hold, “Angel Has Fallen” will take in about double the next title, Universal’s second weekend of raunchy comedy “Good Boys” with about $10 [...]

  • Aracne

    Sanfic Standout ‘Aracne’ Filmmakers Discuss the State of Chilean Genre

    A key project at this year’s Santiago Lab, the Santiago Intl. Film Festival industry forum for promising Latin American projects, Florencia Dupont’s “Aracne” is representative of a push from the next generation of Chilean filmmakers into genre cinema and the themes it can explore. “Aracne” turns on Beatriz, a young journalist at a small Santiago [...]

  • Eduardo Machuca

    Chile’s Eduardo Machuca Unveils Machuca Films Slate (EXCLUSIVE)

    SANTIAGO, Chile – Eduardo Machuca, the former film co-ordinator of Chile’s Ministry of Foreign Affairs, has launched his own production company, Machuca Films. “After 25 years at the ministry, I felt I needed to tap my creative side,” said Machuca, who is also tying the knot on Saturday (Aug. 24) with a former Sanfic staffer, [...]

  • Robert Downey Jr. Disney Legends Ceremony,

    Robert Downey Jr. Reveals He Was Busted for Smoking Pot at Disneyland

    Robert Downey Jr. celebrated his Disney Legend status by sharing the endearing tale of how the first time he visited Disneyland, he was arrested. The Iron Man actor was being honored in Anaheim at Disney’s biennial D23 convention. After a brief introduction by Disney chief executive officer Bob Iger, Downey felt he had to come [...]

  • Thandie Newton Reminiscence

    Thandie Newton Reteams With 'Westworld's' Lisa Joy on 'Reminiscence' (EXCLUSIVE)

    Following her Emmy win for her performance on “Westworld,” Thandie Newton is joining the feature directorial debut of the show’s co-creator. Sources tell Variety that Newton is set to join Hugh Jackman and Rebecca Ferguson in Warner Bros.’ “Reminiscence,” directed by “Westworld’s” Lisa Joy. WB acquired the rights to the package after this year’s Berlin [...]

  • Ming-Na Wen poses at the Disney

    Original 'Mulan' Star Ming-Na Wen Weighs in on Remake's Controversy

    Ming-Na Wen, who played the leading voice role in the original 1998 version of “Mulan,” has spoken out about the recent controversy surrounding Disney’s forthcoming live-action remake, which has been co-opted by China’s authoritarian regime to attack Hong Kong protestors. “We are living in a world right now where there’s so much change and confusion [...]

More From Our Brands

Access exclusive content