MoviePass parent company Helios & Matheson Analytics has launched a new subsidiary, MoviePass Films, and said it is acquiring Emmett Furla Oasis Films, producer of movies including Lone Survivor. The deal encompasses the EFO Films library as well as the company’s current slate, which includes Gotti, the John Travolta biopic backed by MoviePass Ventures that is set for summer release.
The transaction brings together a known production entity with a company which has riled up the exhibition sector with its fixed-price subscription movie plan and panicked investors, who have seen the parent company stock take a dive. Distribution and exhibition are apt to view this deal with skepticism, akin to rearranging deck chairs on the Titanic. Many veterans of the box office trenches tell Deadline that MoviePass will not be able to weather the intense summer season of scheduled blockbusters, and could soon be out of business.
Today’s news follows a significant development for Helios. Citadel Securities said yesterday it had taken a 5.4% stake in Helios, boosting shares double digits, though today they are in red figures again and flirting with their 52-week low of 40 cents a share. In recent weeks, especially after the company warned of a cash crunch, the stock has retreated far below its high last fall of $38.86. A wall of doubt in the industry and on Wall Street has faced the company — in particular the formidable costs it faces in terms of increasing its membership base, with returns limited by the $9.95 subscription price.
Upcoming titles among EFO’s planned 12-15 releases a year include Boss Level with Naomi Watts and Mel Gibson; 2Guns, Escape Plan 2 and Escape Plan 3 with Sylvester Stallone; and The Irishman, Martin Scorsese’s film starring Robert De Niro and Al Pacino.
Terms of the deal were not disclosed, though the parties confirmed it involved a combination of cash and stock.
Under the arrangement, MoviePass Films will be 51%-owned by Helios, with 49% owned by EFO Films. MoviePass Films, according to the official announcement, will focus on “studio-driven content and new film production for theatrical release and other distribution channels.” Randall Emmett and George Furla will serve as co-CEOs of MoviePass Films. Ted Farnsworth will be chairman of MoviePass Films, with MoviePass CEO Mitch Lowe also holding a board seat.
The game plan for the new venture is to capitalize on the capabilities of MoviePass, which now has more than 3 million subscribers and it is burning through millions of dollars a month trying to add more. That gives MoviePass Films a built-in marketing base, the companies said.
“To have such a well-known, quality production company join forces with the Helios/MoviePass group of companies is truly remarkable,” Lowe said. “Since we began disrupting the movie industry with our unprecedented low-cost movie theater subscription service, MoviePass, we have envisioned owning and developing our own studio content and using the power of our several million subscribers to bolster the success of the box office for our films. I believe MoviePass Films will accelerate those efforts and demonstrate the power of MoviePass to drive movie theater attendance and downstream sales, for the benefit of moviegoers, movie theaters, studios and the film entertainment ecosystem as a whole.”
Emmett called the deal “epic.” He said during his dealings with MoviePass on Gotti, he “immediately saw how revolutionary the MoviePass service is. I have never seen any player in our industry move so quickly and gain such a large following in such a short period of time. What impresses me the most is that MoviePass can guarantee box office attendance, which is a game changer. I don’t believe anybody else can do that.”