There’s more to Korean entertainment than “Parasite,” BTS and “Gangnam Style.” Notably, an animation sector that is responsible for keeping the long-running U.S. hit “The Simpsons” tooned up, but rarely gets the credit.
Independent production company Redrover is in Berlin on a mission to re-establish itself as a leading player in the cartoon industry, where its property “The Nut Job” has the makings of a global franchise, but only a few fans would identify it as Korean.
“Before ‘Parasite,’ ‘Nut Job’ was one of the most successful pieces of Korean intellectual property of all time,” said Chris Lee, an experienced indie sector executive who joined as the company’s head of international affairs in January 2019, after stints at Showbox and running her own acquisitions firm CLP.
She acknowledges that her task is no easy one, and that the company’s recent history is a tear-jerking saga of obstacles on the way of success. On three occasions, Redrover has been nearly dragged under by the bankruptcies of its business partners. “My colleagues and I cried a lot last year, as we watched the company sink,” said Lee.
But, against the odds, Redrover was thrown a lifeline.
“Everyone thought we would go under. But our failure to collapse has disappointed a number of players from screenwriters to production companies, who all wanted to take over our IP,” Lee told Variety. Redrover has more than a dozen properties in addition to “Nut Job.”
The collapses of U.S. indie studio the Weinstein Company, North American distributor Open Road and Canadian animation contractor ToonBox Entertainment all presented problems for Redrover.
TWC had been the sales agent on 2014 animated caper “The Nut Job” and on the 2017 sequel “Nut Job 2: Nutty By Nature.” The Harvey Weinstein scandal and the company’s subsequent meltdown left Redrover with damaged relationships and in financial distress. Among the problems were monies that Lee says were paid directly to TWC instead of to the film’s collection account.
Lee says that due to complex corporate intermediary structures, Redrover failed to fully enjoy the fruits of the stateside success of the two “Nut Job” films. (The first grossed $121 million worldwide, including $64.3 million in North America. The second scored $68.7 million worldwide, of which $28.4 million came from the U.S. and Canada.) The merger of Open Road into Global Road and Global Road’s September 2018 collapse and subsequent takeover by Raven Capital make unpicking those problems still harder.
And last year, the films’ physical producer ToonBox also went under. Like many film productions attracted to work in Canada, “The Nut Job 2” had been structured to claim provincial and federal refundable tax credits. The credits were used by a ToonBox subsidiary to obtain funding from Pacific Mercantile Bank, with Toonbox acting as a guarantor. When the production company failed to repay Pacific Mercantile $5.67 million (C$7.5 million), the bank called in an interim receiver in April.
There was also a Chinese angle to the corporate chaos. Suning, a Chinese retail giant with ambitions in entertainment and streaming, became one of Redrover’s biggest shareholders in 2015, at a time when Redrover was still listed on Korea’s KOSDAQ stock market. (Suning also has stakes in the defunct LeEco group, was part of the rescue consortium for Dalian Wanda’s property portfolio and bought a major piece of the Inter Milan soccer club in 2016.)
Suning’s stake is now negligible, but at the time it was hoped that Suning would facilitate content sales in Asia’s biggest consumer market. But Suning discovered that Redrover’s accounts were in a mess, questioned the two films’ budgets (public sources show budgets of $42 million for the first film and $40 million for the second) and soon clashed with ToonBox.
It seemed only a matter of time before Redrover would succumb to pressure and collapse. In 2019, it was suspended from the Korean stock market over payment issues.
Instead, Redrover was rescued in December by privately controlled Korean investment group WinAsia Partners. WinAsia put up an initial $5 million and, with a 20% stake, is now the biggest shareholder. Since then it has paid off debts and helped Redrover acquire all tangible and intangible assets of ToonBox Entertainment from Toonbox’s administrators.
The old management has now exited to be replaced by WinAsia’s China-connected representatives, including Lee Soochul attorney at Anjie Law and advisor to “Parasite” producer Barunson, who is set as CEO; Philip Bae, one of Korea’s best-known investors, having co-founded Asian social media and search giant Naver; and Kim Jongmoon, former executive at Nokia and Microsoft, and the Beijing office head for the Korea-China Cultural Center.
“While new to animation, they are savvy administrators, with extensive experience of China, and in CG and the gaming industries,” said Frederick Stiehl, who is advising the firm from Germany.
“With this new breath of life, Redrover hopes soon to be able to announce the beginning the production of new feature-length film ‘The Nut Job 3,’ and a spin-off TV series,” said Lee. “We are nearly done with legal clearances to make sure that there are no unfulfilled obligations, outstanding payments, or third party rights to the film, or its underlying elements.
“We have not announced details of the projects, and are not yet pitching to rights buyers. Instead, Berlin is about taking meetings with possible finance partners,” said Lee.