New Hollywood player STX Entertainment said it raised a large equity capital investment from Hong Kong media company PCCW, and China’s internet giant Tencent Holdings. STX also raised new funds from East West Bank’s Dominic Ng, and existing investors TPG Growth, Hony Capital, Gigi Pritzker, Michael Pucker and William Wrigley Jr.
“The new alliance represents an important milestone in expanding PCCW’s strategic investments into compelling content creation, not simply for audiences in Hong Kong but also for international audiences. Furthermore, STX’s wide release of films and scripted television series can also be distributed across PCCW’s pay TV and OTT platforms, thus bringing the best content to viewers in Hong Kong, Southeast Asia and India,” said Janice Lee, managing director of PCCW Media Group.
“We believe in an open platform strategy to partner with media companies to create and distribute premier content globally,” said Martin Lau, president of Tencent. “We look forward to partnering with them to capture the many opportunities the evolving media landscape presents.”
“We conceived STX for the new media landscape to meet the changing needs of talent, industry partners and audiences. We’ve broken down the traditional silos of the entertainment business to become the best home for stars and creators to tell their stories anywhere and through any format,” said film producer Robert Simonds, chairman and CEO of STX Entertainment.
“STX is successfully bridging the U.S. and Chinese media and entertainment markets—the two largest in the world,” said John Zhao, chairman of Hony Capital.
“When we co-founded STX, we saw an opportunity to fill existing voids in the entertainment and media industries, which stemmed from the traditionally siloed nature of each business,” said STX co-founder and TPG Growth Managing Partner Bill McGlashan.
Through its alliance with PCCW, STX will provide original and first-run Hollywood content, as well as co-create regionally tailored programming for PCCW to distribute across its television and digital channels and OTT services in Hong Kong, Southeast Asia and India. STX also has a content partnership with Tencent.
STX is currently on track to release 12 star-driven, wide-release films per year. Following their launch, the company’s scripted and non-scripted television businesses have already secured deals for 22 shows with multiple networks in the U.S. and Asia.
STX will become the first U.S.-based entertainment company involved in a broadcast television show airing in China. The company also recently established an international office in London.
The Raine Group LLC acted as financial advisor to STX regarding the investments. STX general counsel Noah Fogelson led the deal on behalf of the company. Kirkland & Ellis LLP acted as legal advisor.
STX was founded in 2014 by Robert Simonds and Bill McGlashan. Simonds previously produced over thirty movies, which reportedly generated more than $6 billion in worldwide revenue, including Cheaper by the Dozen and The Pink Panther with Steve Martin, Big Daddy and The Waterboy with Adam Sandler, and This Means War with Academy Award-winning actress Reese Witherspoon and Tom Hardy. He also produced a number of profitable cult films, including The Wedding Singer, Joe Dirt, Half Baked, and Happy Gilmore.
In March 2015, STX announced a deal with Chinese film production company Huayi Bros. to co-finance at least 18 films to be produced over a three-year period beginning in 2016, which would increase STX’s slate to 12 to 15 films annually through 2018.
The board of directors of STX includes Frank Biondi, the former president and CEO of Viacom and former chairman and CEO of Universal Studios; Tony Vinciquerra, former chairman and CEO of Fox Networks Group; film producer Gigi Pritzker, founder of Odd Lot Entertainment; David Bonderman, founding partner of TPG; and John Zhao, CEO of Hony Capital. East West Bank chairman Dominic Ng will now join the company’s board too.