Open Road Films, the distributor behind the best-picture Oscar winner “Spotlight,” has been sold to Tang Media Partners, a Los Angeles-based company with backing from China.
Financial terms were not disclosed.
Founded in 2011 as a joint venture of theater chains AMC Entertainment and Regal Entertainment, L.A.-based Open Road is best known for adult-oriented dramas such as “The Grey” and “Nightcrawler.” “Spotlight,” about the Boston Globe’s investigation into child abuse in the Catholic Church, won the Oscar for best picture in 2016.
The deal, announced Monday, represents a gamble for Tang Media, which has been on the hunt for a U.S.-based film company to accelerate its goal to become a global entertainment producer and distributor. Open Road has struggled to release commercial hits in recent years, as the box office has become increasingly treacherous for the kind of mid-budget movies it distributes.
Tang Media, founded in 2015 by former Bear Stearns Asia chief Donald Tang, has deep ties to China, where the government has been more closely scrutinizing Hollywood deals. The company’s backers include Chinese social media giant Tencent Holdings, which owns the popular WeChat messaging service. Last year, Tang bought international film sales and distribution company IM Global.
Open Road Chief Executive Tom Ortenberg was upbeat about the deal in an interview with The Times, saying Tang would be an ideal fit for the company to grow its film business to take more, and bigger, bets. He said recent hits from other studios, including Sony’s “Baby Driver,” prove that there’s a healthy market for midsized films as the major studios place their bets on franchises.
“I'm bullish on the midsize space, I happen to think our upcoming slate is the best we’ve ever had,” Ortenberg said.
Open Road, which has typically released seven to eight movies a year, will increase its output by two to three movies, Ortenberg said.
“We’ll probably be taking some bigger swings,” Ortenberg said. “But the mission to provide quality midsized theatrical motion pictures to AMC, Regal and all other exhibitors remains the same.”
Ortenberg has signed a new contract to stay with Open Road, which will maintain a marketing relationship with AMC and Regal, he said. The company’s next release is the computer-animated sequel “The Nut Job 2: Nutty by Nature.”
Tang has been in on-and-off talks with Open Road for about a year. The Hollywood Reporter first reported last week that Open Road was near a deal to sell to Tang.
Until recently, AMC and Regal were unwilling to sell. However, the theatrical exhibition industry has come under pressure from investors over concerns about fluctuations in the box office and the ongoing efforts in Hollywood to shrink the theatrical release window. AMC’s stock fell 25% in after-hours trading Tuesday after reporting worse-than-expected earnings.
“Open Road’s addition to Tang Media Partners is a critical step in our strategy to enable our production team to collaborate with the most talented, visionary filmmakers in bringing targeted content to audiences everywhere,” Tang said in a statement.