The Hollywood-Bollywood Mega Merger
In 2020, regulators will see that STX Entertainment and Eros International are wed, American, and Indian production studios.
These aren’t the biggest movie makers in town, nor the most well-known in investing circles, but the value of their corporate combination will run into the billions of dollars. Mega companies like JP Morgan and Tencent have a lot riding on their success!
Tencent has been a longtime shareholder and funder of STX. That won’t change, while JP Morgan expects to be paid back in full for its inaugural 350-million-dollar loan, kick-starting the two companies’ filmmaking ambitions!
Huge studios like Marvel, Warner Bros, and Paramount have gone all-out for big blockbuster hits. That strategy works with franchises like ‘Star Wars’ and ‘The Lion King,’ but when they’re finished, creative arts projects are pricey and unpredictable.
The old mid-range, mid-budget film slate has been left behind everywhere except India. That’s why STX and Eros plan to use their funding to combine the best of Hollywood and Bollywood, testing cultural crossovers in a smaller scale.
Disney investors should respect these upstarts, even if they’re on the fringes right now. In India, the Eros streaming platform is free while the coronavirus keeps people at home. It’s got over 188 million subscribers already, 38 million paid, a great brand, and a deep collection of content.
This is a growth market slipping away from the Mouse House. Its content slate is running dry, and Bob Iger, the famed serial studio acquirer, has stepped away from being chief executive. He’s put the company’s theme park manager in charge, so it could be a close fight for box office dominance in the years to come, folks. Keep abreast of developments!
