Lionsgate Takes Majority Control of Joint Venture With Steven Paul

By Tom Whitfield

Lionsgate will hold majority control of a new joint venture with Steven Paul’s SP Media; SP Media will make a “significant” investment in new initiatives and produce independent feature films for Lionsgate to distribute. Neither side disclosed the investment amount.

Under the agreement, the joint venture will manage the relationship between the companies. Lionsgate will own and control a majority of the venture. SP Media’s capital is intended to support new businesses that expand Lionsgate’s content operations, including continued diversification of 3 Arts Entertainment, Lionsgate’s talent management and production division, into sports and influencer work.

Lionsgate’s disclosure did not name the businesses, define “significant” against a dollar figure, or specify a production slate, budget or timetable. The venture therefore has a controlling owner and an external investor, but no disclosed scale.

The joint-venture announcement followed a report the previous week that Legendary Entertainment had revived its bid to acquire Lionsgate. The partnership does not settle that corporate contest, and the announcement offered no reason for its timing.

What does this change for independent filmmakers?

The agreement creates a production-to-distribution route for independent features made by SP Media: Lionsgate will distribute them. It does not commit Lionsgate to finance or distribute films from unrelated producers, and the announcement named no slate, budget, production schedule or release plan. For outside filmmakers, the change is indirect rather than an open door.

What do the companies promise?

“Steven is a savvy and experienced entrepreneur who has a longstanding relationship with our studio, and I’m pleased to partner with him across multiple touchpoints of our business,” Lionsgate CEO Jon Feltheimer said in announcing the agreement.

“He recognizes the unique and valuable assets that we have built and his investment will help drive the continued growth of these businesses.”

Paul said in a statement: “Lionsgate is one of the most dynamic and entrepreneurial content studios in the media space today. I’m delighted to build on my longstanding relationship with Jon Feltheimer and the Lionsgate leadership team as we grow our businesses together in an industry environment filled with opportunity.”

The statements do not define “multiple touchpoints,” name a business that Paul’s investment would expand, or put a figure on “significant.” The venture’s scale remains unpriced.

The announcement identified Paul as chairman, founder and CEO of Crystal Sky Pictures and SP Media Group. It credited him with shepherding several box-office successes, including the Baby Geniuses franchise, Ghost Rider and Ghost Rider 2: Spirit of Vengeance starring Nicolas Cage, Ghost in the Shell starring Scarlett Johansson, and the Lionsgate-distributed Rambo: Last Blood.

Paul has also personally lobbied President Donald Trump, working with actor Jon Voight on a series of measures to help the U.S. entertainment industry. Those measures include a federal tax incentive for television and film production.

At an Aug. 31 meeting at the White House, Paul cited an upcoming film about Richard Nixon’s early years. He told Trump that the project would need to be produced overseas unless there was a viable U.S. tax incentive.

That lobbying shows Paul has access to Trump. It does not show that access shaped Lionsgate’s decision. The announcement did not connect the Trump initiative or a federal tax incentive to Lionsgate’s investment terms. Nor did it disclose whether an incentive would benefit any joint-venture project.

What assets does SP Media bring?

The deal description listed SP Group of Companies as holding assets in media, entertainment, talent representation, technology, hospitality, banking and real estate. Its named portfolio includes:

• the Samuel Goldwyn Building in Century City;
• the Casa Marella Boutique Hotel in South Beach Miami;
• the JLTV television network;
• Atlas Comics, founded by Marvel Comics owner Martin Goodman;
• Avenue Six Studios in Van Nuys, California;
• Echo Bridge Distribution Co.; and
• Hanks Café in Century City.

The announcement said COO Brian Goldsmith, EVP and general counsel Bruce Tobey and senior VP of corporate development Suzy Felfeli negotiated for Lionsgate. SP Media’s group president and COO Scott Karol negotiated for SP Media. Moelis served as financial adviser to Lionsgate, Lazard served as financial adviser to SP Media, and law firm Paul Hastings represented SP Media.

For Lionsgate, the venture adds outside capital, independent-film supply and a partner whose holdings extend well beyond production. For SP Media, it offers Lionsgate distribution and a route into 3 Arts Entertainment. The terms remain too unspecified to price the opportunity.

The next test is whether the companies name projects, budgets and release dates; until then, “significant” is a promise rather than a plan.