PCCW, Tencent Buy Into US Studio STX
PCCW and Tencent have both bought equity stakes in Hollywood studio STX Entertainment.
Following the deal, PCCW plans to make shows for its linear and OTT platforms in Hong Kong, India and Southeast Asia with STX.
Dominic Ng, chairman of East West Bank, also joined STX's latest funding round, alongside existing investors such as TPG Growth and Hony Capital, and joins the studio's board.
Press release in full below:
STX Entertainment Receives Significant Strategic Investments From PCCW And Tencent to Accelerate Expansion Into Diversified Global Media Company
Extension of Capabilities Across Television, Music and Digital to Enable High-Quality Content Across All Platforms
Further Establishes STX as Leader for Unlocking Content Opportunities for Talent and Brands in China
LOS ANGELES--(BUSINESS WIRE)--STX Entertainment (“STX” or the “Company”) announced today that it has received significant strategic investments from PCCW, a global company headquartered in Hong Kong holding interests in telecom, IT solutions and media including the largest pay-TV service in Hong Kong and a leading OTT service in Asia, and Tencent Holdings, China’s leading provider of online products and services, in exchange for equity stakes in the Company. STX also received new investments from East West Bank’s Dominic Ng as well as existing investors TPG Growth, Hony Capital, business interests of Gigi Pritzker, Michael Pucker and their immediate family and William Wrigley Jr. Proceeds from the investments will be used to accelerate STX’s expansion into a fully integrated and diversified media company, designed to capture new global opportunities arising from a rapidly evolving media landscape. Financial terms were not disclosed.
Building on the Company’s established, self-sustaining film business, STX will expand its television and international operations, and add high-quality, full-scale capabilities across music and digital, including short-form, app-based and virtual reality/immersive entertainment. Paired with STX’s unique operational structure and content development strategy, unparalleled partnerships and global distribution capabilities, these broadened content capabilities will allow STX to develop and distribute compelling content across traditional and emerging platforms at scale. STX will be positioned as the only media company that can provide A-list talent and powerful global brands with an integrated, seamless storytelling platform to better connect fans to content across any medium.
“We conceived STX for the new media landscape to meet the changing needs of talent, industry partners and audiences. We’ve broken down the traditional silos of the entertainment business to become the best home for stars and creators to tell their stories anywhere and through any format,” said Robert Simonds, Chairman and CEO of STX Entertainment. “Whether it’s through television, apps, video games, social media, film or any other medium, we’ve created the only company with the infrastructure, reach and industry expertise to incubate, generate and distribute content for all platforms, on a global scale.”
Simonds continued, “Developing deep relationships with smart, experienced, well-connected partners is a cornerstone of our value proposition. We’re excited to be collaborating with PCCW and Tencent, extremely well-respected and powerful companies, as we execute on our long-term strategy.”
In connection with their investments, PCCW and Tencent have entered into respective content distribution agreements with the Company. Through its alliance with PCCW, STX will provide original and first-run Hollywood content, as well as co-create regionally tailored programming for PCCW to distribute across its television and digital channels and OTT services in Hong Kong, Southeast Asia and India. STX also has a content partnership with Tencent. Additionally, East West Bank Chairman Dominic Ng will join STX’s Board of Directors.
Janice Lee, Managing Director of PCCW Media Group, said, “The new alliance represents an important milestone in expanding PCCW’s strategic investments into compelling content creation, not simply for audiences in Hong Kong but also for international audiences. Furthermore, STX’s wide release of films and scripted television series can also be distributed across PCCW’s pay TV and OTT platforms, thus bringing the best content to viewers in Hong Kong, Southeast Asia and India.”
“We believe in an open platform strategy to partner with media companies to create and distribute premier content globally,” said Martin Lau, President of Tencent. “We look forward to partnering with them to capture the many opportunities the evolving media landscape presents.”
“STX is successfully bridging the U.S. and Chinese media and entertainment markets—the two largest in the world,” said John Zhao, Chairman of Hony Capital. “By making China a foundation of its strategy and structure from inception and building the right relationships in the region, STX has put itself in an unparalleled position to unlock content opportunities for talent and brands in China, the world’s fastest-growing entertainment consumption market, and throughout other key Asian markets.”
“When we co-founded STX, we saw an opportunity to fill existing voids in the entertainment and media industries, which stemmed from the traditionally siloed nature of each business,” said STX Entertainment Co-Founder and TPG Growth Managing Partner Bill McGlashan. “From the beginning, we understood the greater opportunity for STX beyond film and TV. As we’ve succeeded in traditional media – creating one of the biggest film studios in the country – we are incredibly excited about revolutionizing the entire entertainment industry.”
The Company is currently on track to release 12 star-driven, wide-release films per year. Following their launch, the Company’s Scripted and Non-Scripted television businesses have already secured deals for 22 shows with multiple networks in the U.S. and Asia. STX will become the first U.S.-based entertainment company involved in a broadcast television show airing in China. The Company also recently established STX International in London, a new division dedicated to identifying and executing on global opportunities for development, production and distribution of the Company's high-quality, star-driven content.
STX’s General Counsel Noah Fogelson led the deal on behalf of the Company. Kirkland & Ellis LLP acted as legal advisor and The Raine Group LLC acted as financial advisor to STX regarding the investments.
Source: STX Entertainment