Startup Makes Off With Gangster Film in $50 million deal

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The biggest deal at this month’s Cannes Film Festival was the $50 million winning bid from STX Entertainment for international distribution rights to Martin Scorsese’s new gangster film, “The Irishman.”

After lengthy negotiations at the Hotel Du Cap on a night that was more parlay than party, the Burbank-based company, formed just two years ago, emerged with an agreement that establishes it as a major player in movies.

“What STX is getting with this smart play is first-tier status as a production and distribution engine,” said Tom Nunan, executive producer of Oscar-winning movie “Crash” and founder of Venice-based Bulls Eye Entertainment. “They’re announcing to the world, but frankly, more importantly, they’re saying to Hollywood, Call us first, before you call any other studio. We’ll move quickly, we’ll pay handsomely, we’re well-funded. Call us first.”

A red-hot property at Cannes last week, “Irishman” is set to reunite director Scorsese with star Robert De Niro for their first collaboration since 1995’s “Casino” and teams Scorsese for the first time ever with gangster movie legend Al Pacino. Paramount Pictures has domestic rights on the film, which might also star Harvey Keitel and Joe Pesci.

Winning the bidding war for foreign rights proves just how well-funded STX is for a startup. Co-founded by Robert Simmonds, a prolific producer whose movies have made more than $6 billion worldwide, and private equity investor Bill McGlashan, the company is backed by billionaire investors Gigi Pritzker and Beau Wrigley Jr., private equity firms Hony Capital of China, and San Francisco-based TPG Capital. It also has a multibillion-dollar film-financing deal with China’s Huayi Brothers Media Corp.

There was a wise strategy behind the big spend on “Irishman,” added Nunan, based on Scorsese’s track record with gangster films.

“This isn’t just a sentimental play, it’s that these films perform very well internationally,” he said.

“Casino” grossed $116 million worldwide with a foreign box-office contribution of $73 million, 63 percent of the total figure.

The director’s most recent gangster movie, 2006 Oscar winner “The Departed,” grossed $157 million at the foreign box office compared with $132 million in the Unites States. His last major feature, 2013’s “The Wolf of Wall Street,” brought in $275 million at the foreign box office compared with $116 million domestically.

STX, which did not return requests for comment, has released two films so far this year, horror film “The Boy” and action movie “Hardcore Henry,” both of which were profitable, and has five more on its 2016 slate.

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