William McGlashan and Robert Simonds met as Yale undergraduates. McGlashan went on to become a founder of private equity firm TPG Growth, while Simonds moved to Hollywood and became the producer of inexpensive, profitable comedies such as Cheaper by the Dozen, Herbie Fully Loaded, The Pink Panther and several Adam Sandler movies. Now the two have joined forces to build STX Filmworks, a studio for a new age of global entertainment .
Q: SO YOU FIRST MET AT YALE IN THE 1980S?
William: We did, but Bob has no memory of me.
Robert: This is untrue. He keeps saying that as if the more times he says it…
William: But the concept for STX was actually hatched at Yale’s School of Management—we were on the board—a few years ago. We were talking late at night about what was happening in the media world and how we believed there was an opportunity there.
Robert: The studios were making fewer but more expensive movies, which was creating a vacuum in the mid-range, movies with $20 million to $60 million production budgets. There are about 70 movies a year missing from the major studios’ slates. And this is actually a really good business—you can build movies like this with stars, who are increasingly underemployed.
MOVIES LIKE WHAT?
Robert: The Other Woman, Neighbors, 21 Jump Street.
WHAT’S THE ADVANTAGE OF MOVIES IN THIS BUDGET RANGE?
Robert: If you’re a major studio sitting on a billion dollars of overhead, you need to be in the business of trying to make a billion every time out. We’re shooting to make $100 million a movie.
William: The plan is to do what Bob has already done quite successfully—make commercial movies that have historically been quite successful on an ROI basis.
YOU’RE TALKING ABOUT MAKING MOVIES WITH PEOPLE LIKE ADAM SANDLER AND WILL SMITH, BUT ISN’T THE BOX OFFICE POWER OF MOVIE STARS ON THE WANE?
Robert: That’s a myth. The people saying that say, well, the star in this independent art film didn’t work. That’s just a very different and not very profitable business. But a branded star in a branded role is a great way of cutting through the noise.
YOU HAVE SIGNED DEALS WITH THE MAJOR THEATER CHAINS RESERVING SOME 3,000 SCREENS A YEAR FOR YOUR PRODUCTIONS. HOW DID YOU GET THEM TO AGREE TO SUCH AN UNCONVENTIONAL MOVE?
Robert: The exhibitors need people in their theaters so they can sell popcorn. But there are fewer movies and the studios all want the same release date—Memorial Day, July 4th and so on. So the theater owners have been having a difficult time.
YOU HAVE ALSO BROUGHT IN CHINESE INVESTORS, SOMETHING MANY HOLLYWOOD FILMMAKERS HAVE TRIED UNSUCCESSFULLY TO DO. HOW DID THAT HAPPEN?
William: We always envisioned a landscape that included China, and specifically (Chinese firms) Hony Capital and Shanghai Media Group. TPG has a long history in China—we were the first major private equity firm to invest there—so it helped that we have a reputation there. They could have picked any of the [studio] brands that we all know and love, and they chose to partner with us.
AND YOU’RE FINANCED TO THE TUNE OF $1 BILLION OVER FIVE YEARS.
Robert: We have built all of our financing and models around making sure that these movies work not just domestically but also globally. We have 15 films that we’re going to start making, and we want to grow as quickly as possible.
William: We’re showing up with this fresh model looking at a dramatically different media landscape. You have Google, Netflix, Amazon—the dynamic around consumption of content is fundamentally different than it was a short time ago. A player who shows up with a fresh set of eyes and without the structure of the legacy studios is in a great position to address that difference.
For more information, contact William McGlashan, [email protected], 415.743.1500, or Robert Simonds, 310.742.2300.
