The pending Amazon-MGM and WarnerMedia-Discovery deals have set off another round of speculation about media consolidation, as tech companies and Hollywood studios look to bolster their libraries with valuable intellectual property. But the latest potential deal is a lot different from the rest.
A24, the award-winning independent film studio and distributor behind films like Moonlight, Lady Bird, and Hereditary, has recently explored a sale, according to Variety. The company’s asking price was reportedly as much as $3 billion—about a third of the amount Amazon paid to acquire MGM in May. A24—which is majority-owned David Fenkel and Daniel Katz, two of its founders—did not respond to a request for comment, and it’s unclear if sales talks are still ongoing.
To a potential suitor, the real value of A24—whose films have earned more than 30 Oscar nominations since it was founded in 2013—is its unique brand identity. The company’s films individually don’t smash the box office. (Hereditary, a 2018 horror film, is its highest-grossing title at $80 million).
But, taken together, they tell the story of a modern-day Miramax—a film distributor with an army of highly engaged followers and a propensity for attracting top Hollywood talent to its projects. A24 has carved out a small but powerful niche of releasing original movies for adults at a time when seemingly everything else that comes out in a theater is a superhero sequel or some other adaptation of a well-known media franchise. Its films tend to receive critical accolades, which would strengthen the film bona fides of any company that purchases it.
Amid the escalating content wars, that’d be a valuable chip to have for a larger media company that might not be able to cultivate such a brand on its own. And even if A24 doesn’t intend to sell at this moment, the pressure to link up with a conglomerate that’s flush with cash isn’t likely to go away. Here’s who could be interested in snapping up A24:
Apple is the most obvious suitor. It reportedly explored an acquisition of A24 in 2018. The two companies maintain a close relationship: That same year, Apple announced a multi-year partnership in which A24 would produce some films exclusively for the tech giant. The 2020 Apple TV+ film On the Rocks, directed by Sofia Coppola, was a result of that arrangement.
With $200 billion cash on hand, Apple has the money for a deal. It would be a substantial boost to its nascent streaming service if all A24 films—not just a select few—eventually made their way to it. But in Apple’s long history of acquisitions, it hasn’t yet scooped up a major player in film or television. Still, it’s made an effort to bring in individual talent (like former HBO boss Richard Plepler), so it might be intrigued by A24’s in-house executives and marketers.
Amazon just bought MGM, the historic studio behind James Bond and other global franchises, for $8.5 billion. That doesn’t mean it’s done growing its entertainment business. Jeff Bezos, Amazon’s founder and executive chairman, is known to have grand ambitions in Hollywood. Under his watch, the company paid $1 billion to produce a TV series based on The Lord of the Rings before a single episode aired.
A24 would likely net Amazon more Oscars and add another brand to enhance Amazon Video, which reaches nearly 200 million users around the world. But there’d be questions about Amazon’s ability to mesh cultures with the much smaller, hipper A24. Amazon’s video-game efforts have stalled largely due to clashes between its rigid, corporate culture and the more carefree, creative vibe of the gaming world. A24 could struggle to remain true to itself if acquired by Amazon.
The Mouse House already owns a number of film brands, including Lucasfilm (maker of Star Wars), Marvel, and now, thanks to its acquisition of Fox’s entertainment assets, the Fox Searchlight indie studio. There’s already some overlap between Fox Searchlight and A24, so Disney might not feel it needs a brand like A24 under its corporate umbrella. But it’s never been shy about swallowing up the competition.
A24 fans likely prefer the company remain independent. An acquisition by Big Tech or a major Hollywood studio would jeopardize everything A24 has built in the last eight years. Operating independently, outside the grip of established institutions, has allowed A24 to create a unique identity and thrive in the age of content glut. Its brass might decide that’s ultimately more important to protect than a boost in funding or a broadening of reach.