Distributor Enters New Stage With Producer Deal

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Hollywood’s newest mini-studio is aiming to become a bigger player in the content battle among Netflix, Amazon, European broadcasters and the major studios.

Hoping to find room at the table is a new partnership between the Mark Gordon Co. – the L.A. production entity behind ABC drama “Grey’s Anatomy” and CBS crime procedural “Criminal Minds” – and international distributor Entertainment One of Toronto.

EOne last month bought a 51 percent stake in Gordon for $133 million, marking the London Stock Exchange-listed firm’s entry into the crowded U.S. production market. Under the terms of the deal, EOne has the option to buy the rest of the business in seven years.

Founded in 1973, EOne drew most of its early revenues from record sales and later DVD sales. But with those sales falling, the company has been trying to ensure its survival in the changing landscape of the electronic age with distribution deals, acquisitions and now by going after content. It recently started producing films, including 2013 horror sequel “Insidious: Chapter 2.” The Gordon deal marks the firm’s first major step into global production.

“EOne is going gangbusters and this deal bolsters its television business by giving the company a strong presence in the U.S. network-scripted arena for the first time and bolsters its film assets, too, thanks to Mark Gordon’s expertise in both areas,” said Matthew Thompson, a partner at the Century City office of law firm Stroock & Stroock & Lavan, who represented EOne in the deal. “With new shows, new films and new opportunities ahead, the partnership has an exciting future.”

Gordon, the production firm’s namesake founder, will continue as chief executive of Mark Gordon Co., which will remain a separate company, though now with larger distribution network.

“We have great ambitions to expand in the U.S.,” Gordon said in a statement. He declined to comment further.

The plans announced so far include developing and producing film and television content across all genres and adding online content to enhance the audience experience.

But as the new kids on the block plot those plans, rival companies are welcoming the competition, saying viewers will be the ultimate winners.

“We’re in a convergence where traditional and digital are merging and what many may see as chaos is actually a new golden era of content where there’s room for everyone,” said Will Keenan of Endemol Beyond USA, a digital division in Los Angeles of global production company Endemol. “The viewer is the new studio boss. Engage or die. The crowd is always right.”

Upcoming film projects at Gordon Co. include a new Steve Jobs biopic written by celebrated screenwriter Aaron Sorkin; a remake of Goldie Hawn comedy “Private Benjamin”; and, on TV, a “Criminal Minds” spinoff series. EOne will distribute the new productions.

In buying a stake in the Gordon company, EOne is betting on Gordon himself, a prolific Hollywood veteran who has produced more than 75 motion picture and television projects, including blockbusters such as “Saving Private Ryan” and “Speed” as well as TV shows such as “Private Practice,” “Army Wives” and “Ray Donovan.”

“Mark brings a wealth of experience and talent to the table, and partnering with strong creative companies like his is right on strategy as EOne continues to build its global platform,” said Darren Throop, chief executive of EOne, in a statement.

Offering Gordon, a two-time Emmy winner, creative freedom was seen as a key element of the partnership agreement, according to sources close to the deal.

Royalty payments from Mark Gordon Co.’s portfolio of continuing long-running hits such as “Grey’s Anatomy” and “Criminal Minds” will ensure a steady stream of income to EOne and boost its library of film and TV titles, which already contains valuable content such as smash hit zombie series “The Walking Dead,” for which it shares international distribution rights with Fox International Channels. In film, EOne is the largest independent multiterritory distributor in the world.

Beverly Hills law firm Hansen Jacobsen Teller Hoberman Newman Warren Richman Rush & Kaller represented Mark Gordon Co. on the deal.

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