Magnolia Pictures has hired investment bank Stephens to explore the possibility in selling the company. The distributor, which is owned by Mark Cuban and Todd Wagner’s 2929 Entertainment, is looking to capitalize on the demand for library content by streaming services, the New York Times is reporting.
Streaming services attached to bigger studios, like Paramount+ and HBO Max, are always looking to subsidize their own film libraries with outside projects. Companies without their own studios, like Netflix and Apple, are interested in adding movies to their original collections.
Magnolia, which has been a leading independent film distributor for the past two decades, has garnered a library of approximately 500 titles. The company’s president and co-founder Eamonn Bowles, shared that it had a revenue of about $30 million last year, and could reach $40 million in revenue this year, due to its high content of acclaimed projects. However, he declines to speculate on a potential purchase price for the company.
Cuban, who’s known in part for appearing on ABC’s hit business reality show, Shark Tank, and Wagner acquired Magnolia with arthouse cinema chain Landmark in 2003. The duo then sold Landmark to Cohen Media Group in 2018.
The billionaire entrepreneur Cuban previously considered selling Magnolia and Landmark in 2011, but said at the time that the price had to be very compelling. He and his co-owner have been more open to considering different offers recently.
“We went through this process 8-10 years ago and did not sell it then, and we may not sell this time. But the climate this time is strong and we have done extraordinarily well,” Bowles told Deadline. He added that Magnolia has done especially well during the pandemic, with the library throwing off more cash than ever. “We have these ten year old films making more [now] than in their third year,” he revealed.
If Magnolia is sold, the acquisition would follow the (still pending) deal made between Amazon and MGM. Reese Witherspoon’s media company Hello Sunshine has also been acquired by a new Blackstone-backed group led by Kevin Mayer and Tom Staggs for a reported $900 million. The duo is also talking with Will and Jada Pinkett Smith about acquiring their studio, Westbrook.
ViacomCBS also bought a 49 percent stake in Miramax’s 700-film library, and the movies in that collection will available for streaming on Paramount+ in April. Then in July, Lionsgate picked up 200 titles and a 20 percent stake in Spyglass Media.
Magnolia, which was founded in 2001 by Bowles and Bill Banowsky, is known for releasing such documentaries as Blackfish, I Am Not Your Negro and Capturing the Friedmans. The company’s recent releases include the Sundance selection Mayday, as well as Cryptozoo Yakuza Princess, Swan Song and Mandibles. Magnolia, like many other independent distributors, typically acquires films from the festival circuit for wider distribution.
However, Cuban and Wasnger may have a challenging time selling Magnolia and its genre label, Magnet Releasing. While some of its films have been doing well digitally, the overall demand for specialty and arthouse features has declined in recent months. The key older demographic for the company’s movies has been more hesitant to return to theaters since the start of Covid.