Indie Giant A24 Recently Entertained A Potential $3 Billion Dollar Sale

In the Netflix era, more and more movies, particularly mid-budget dramas, have shifted to streaming services. And in an effort to compete with each other and woo subscribers, those services have been looking to acquire companies that would help them expand their libraries. These are the circumstances under which indie studio A24 may be looking to broker a sale.

Variety reports that A24 has been testing the market for a potential sale, "floating an asking price of between $2.5 billion to $3 billion." If that seems like a steep amount, consider the climate, where MGM recently sold to Amazon for $8.6 billion, and where smaller banners like Reese Witherspoon's Hello Sunshine is said to be valued at $1 billion.

By comparison, when Disney bought Lucasfilm in 2012, it paid $4 billion for the studio, which now seems like a lowball figure. The moviegoing terrain has changed considerably since then, with the coronavirus shuttering theaters and bringing the industry closer to the feared "implosion" that George Lucas and Steven Spielberg spoke of back in 2013. With the pandemic-best box office success of Black Widow, there's every sign now that things are rebounding, but for the time being, at least, that movie and most other new releases are still following the simultaneous theatrical and digital release strategy of Warner Bros.

What Makes A24 Unique

We recently talked about the A24 brand in relation to horror. The studio is known for its innovative marketing, like binding the 150-tweet thread that inspired Zola into a clothbound hardcover. It's also known for its spooky trailers, some of which have been slightly misleading, setting up audiences (and disgruntled CinemaScore responders) with monster-movie expectations, when they were really about to experience a slow-burn psychodrama. We should have known what to expect by the time Hereditary and Midsommar rolled around, but alas.

Of course, A24 isn't only an indie-horror boutique. It's also responsible for "sci-fi caviar" (as iTunes likes to package it) such as Ex Machina, High Life, and Under the Skin. In addition, the studio has received dozens of Oscar nominations for films like Room and a big Best Picture win in 2018 with Moonlight.

Per Variety, the move to potentially sell is one that has been going on under the radar for the last year and a half, yet the trade cites sources within the studio that say A24 is now "focused on expansion and is not prioritizing a sale." We often hear rumblings of this kind right before the deals go through, so if one does happen soon, what would A24 look like under a major media company? Would it get swallowed up or might it prosper in new ways?

The studio already has an existing deal with Apple, which has debuted Sofia Coppola's On the Rocks and other films as Apple TV+ exclusives. However, they've reportedly "passed on numerous titles" that A24 was floating, so that may be a wash.

Becoming a subsidy of a larger corporation might allow A24 to reach a new audience. Alternatively, its niche appeal might get lost in the sea of subscription options and we may see the edges of a unique studio sanded off. As always with the pivot to streaming, the fear is that this is potentially one of those things where the toothpaste can't be put back in the tube.