SoftBank Corp. investing $250 million in Legendary Entertainment
SoftBank Corp. is making its first investment in a Hollywood studio as the Japanese technology giant seeks to bring more content to its mobile and digital networks.
The cash-flush company said Thursday that it will invest $250 million in Legendary Entertainment, the Burbank production house and financier behind recent movies including “Godzilla” and “300: Rise of an Empire.”
SoftBank owns major stakes in industries including Internet and e-commerce, and it has been looking around Hollywood for a studio play. In fact, the announcement with Legendary comes just days after SoftBank held talks to buy Glendale-based DreamWorks Animation for $3.4 billion.
The talks with DreamWorks have quieted and a deal is now less likely, according to people familiar with the matter who were not authorized to speak publicly. SoftBank’s deal with Legendary, however, was probably not related to its talks with DreamWorks, the people said.
SoftBank and DreamWorks declined to elaborate on the terms of the deal and did not make executives available for interviews.
The two companies will create a joint venture focused on making digital content for SoftBank’s mobile and Internet services. The content will be targeted especially for audiences in the booming entertainment markets of India and China, where Legendary’s movies often do big business.
Summer’s “Godzilla” grossed about $525 million in ticket sales around the world, 62% of which came from outside the U.S. and Canada, according to Box Office Mojo. And though last year’s robots-versus-monsters epic “Pacific Rim” posted disappointing numbers in the U.S., it ended up taking in $309 million in overseas box-office, with a robust showing in China.
Analysts said getting a piece of a movie studio will help SoftBank make its other businesses more attractive to subscribers, including mobile phone services.
Mobile companies have long tried to use video, music and games to woo customers. SoftBank, which owns a majority stake in U.S. wireless carrier Sprint, has made no secret of its interest in the entertainment business.
Last year, it tried to buy Universal Music Group from French media giant Vivendi but was ultimately unsuccessful. It also recently gobbled up majority stakes in video game companies, including Finland’s “Clash of Clans” maker Supercell and Japan’s GungHo Online Entertainment.
A movie company is a logical next step for Softbank’s billionaire founder, Masayoshi Son.
“Content has never been too far from what they’ve done,” said Gartner media analyst Michael McGuire. “If they build an ecosystem of services and content, that puts them in a pretty interesting position.”
SoftBank has plenty of money to spend, especially after the initial public offering of Alibaba Group Holding Ltd., the Chinese Internet company that began trading on Wall Street last month. More than 30% of Alibaba’s shares are owned by SoftBank.
The joint venture with SoftBank would not be Legendary’s first attempt to take advantage of the growing audiences in Asia. Its Chinese film unit, Legendary East, last year signed a multiyear pact to co-produce movies with that country’s largest film distributor, China Film Co. Legendary East was formed in 2011.
SoftBank’s investment is the latest infusion of financing for a company that has built a reputation for aggressiveness and taking risks with new movies.
It secured $443 million at the end of 2012, bringing its valuation to $2.5 billion.
The deal announced Thursday would put the company’s value at about $3 billion, according to a person familiar with Legendary’s finances. SoftBank is taking a 10% stake in the entertainment firm.
Nikesh Arora, chief executive of SoftBank Internet and Media, will become a member of Legendary’s board of directors.
“Legendary is already a content powerhouse and we are very excited to make this investment and help them bring their incredibly successful film franchises and other exciting new media content to an even larger global audience,” Arora said in a statement.
Founded by Thomas Tull, Legendary’s largest shareholder, the studio successfully re-booted the Batman film franchise with director Christopher Nolan’s “The Dark Knight” trilogy. It also backed the “Hangover” movies and “Man of Steel,” a Superman film that grossed $668 million worldwide.
Not every film has taken off. Last year’s big-budget “Jack the Giant Slayer” was widely considered a disappointment at cinemas.
Its slate of upcoming pictures includes the sci-fi drama “Interstellar” (also directed by Nolan), with Paramount Pictures distributing domestically.
“It’s a very savvy company working in a highly competitive environment, and they deserve a lot of credit for taking risks,” said Jason E. Squire, an associate professor at USC’s School of Cinematic Arts and editor of “The Movie Business Book.”
Until this year, Legendary had a distribution deal with Warner Bros. that had been in place since 2005. It now has a five-year accord with Universal, which will release and market Legendary movies.
Follow me on Twitter: @rfaughnder
Times staff writer Richard Verrier contributed to this report.
From the Emmys to the Oscars.
Get our revamped Envelope newsletter for exclusive awards season coverage, behind-the-scenes insights and columnist Glenn Whipp’s commentary.
You may occasionally receive promotional content from the Los Angeles Times.