MoviePass Isn't Going Down Without A Fight, Will Raise $1.2 Billion Over The Next Two Years
A couple of weeks ago, we wrote about how MoviePass' parent company might have to raise more than $1.2 billion for the movie ticket subscription service to become profitable, and we had a few goofy suggestions for how they could raise that cash. But it looks like MoviePass isn't going down without a fight, because this week their parent company actually took steps toward raising that ridiculous sum of money in an effort to stay alive.
Read more about the MoviePass fundraising below, and discover how most of that money will be used over the next few years.
The Hollywood Reporter brings word that Helios and Matheson Analytics, MoviePass's parent company, "filed a shelf registration that will offer institutional investors equity and debt" in order to raise the $1.2 billion they'll need for MoviePass to eventually become profitable. Helios and Matheson CEO Ted Farnsworth says he'll likely be able to access that entire amount over the next year or two.
That's not the only thing Farnsworth has been saying. He's reveling in the fact that industry analysts have been doubting MoviePass's sustainability, because it provides him the chance to say that everyone was wrong. "They've been predicting our demise for eight months and we're still standing," he crowed. "Now we'll have a big war chest behind us."
"This is a game changer," Farnsworth said. "Now they know that we are not going away." To be clear, just because the company made this filing doesn't mean it's a guarantee that they'll be able to raise that much capital. But it also indicates that perhaps MoviePass will be able to last much longer than many of its critics thought.
What's All That Money For?
An unknown percentage is going to be set aside for even more acquisitions – "a few" of which are already in final negotiations. MoviePass previously acquired Moviefone in an effort to turn the entertainment website into its own version of Rotten Tomatoes.
Meanwhile, "much" of the $1.2 billion will go to MoviePass Films, the newly-formed production company that intends to produce original movies of their own and use their millions of subscribers to "bolster the success of the box office for [their] films." And don't forget about MoviePass Ventures, a subsidiary that lets them co-acquire movies alongside distributors. They've already done this with both American Animals and Gotti in 2018, with decidedly mixed results: American Animals is a compelling heist film, and Gotti is...well, aside from its shady Rotten Tomatoes user reviews, the best thing MoviePass CEO Mitch Lowe could say about the critically lambasted John Travolta vehicle was "I saw Gotti and I didn't look at my watch once!"