Magnolia Pictures, No Longer for Sale, Finds Opportunity in Hard Times

Kohn’s Corner is a weekly column about the challenges and opportunities of sustaining American film culture.

Every year around this time, I relish the opportunity to vanish into a bubble of Cannes hype and pretend that world-class auteurs dominate the movie business on a global scale. But for the moment, I’ll take a breather from the laughing gas and acknowledge it’s a rough moment for the specialty distribution business — especially in America. A lot of those promising Cannes titles won’t follow me home.

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Few movies that aren’t in English succeed at our box office. Most get lost in the streaming vortex, if they’re lucky to land there at all. Arthouses nationwide continue to face audience decline. Prestige Oscar movies don’t guarantee strong returns. A24’s winning streak faltered with the flop of its most-costly production, “Beau is Afraid,” suggesting that even its adoring audiences have zero interest in daring, original work. Mainstays like IFC Films have been forced to reasses their agenda due to a shifting market and fickle corporate demands. As I wrote in this column last month, the great indie contraction has landed.

That’s why I’m very happy to break some news of a perennial distribution entity revving its engines for Cannes and beyond.

A little over a year and a half ago, reports circulated that Mark Cuban and Todd Wagner were looking to sell Magnolia Pictures just in time for its 20th anniversary. Now, sources tell me that Cuban and Wagner have reversed course. After exploring a few options, the company behind revered 21st century arthouse hits like “Jiro Dreams of Sushi,” “Let the Right One In,” and “Melancholia” has taken itself off the market and doubled down on its ambitions. Longtime executive Dori Begley has been elevated to co-CEO alongside Eamonn Bowles.

Begley has climbed the ranks of Magnolia’s quirky and ever-evolving business model since she was hired as director of acquisitions 16 years ago. Her promotion puts homegrown talent in charge of the company’s future alongside a stalwart veteran of the ’90s indie boom.

I heard murmurings of these changes at this week’s lively BAM gala, which counted Spike Lee among its honorees; Magnolia was one of a handful of film benefactors at the event, alongside A24 and Cinetic. When I reached out to a company representative, he confirmed that the company was no longer for sale.

“For over 21 years under Eamonn’s leadership, Magnolia has been expert at steady growth while navigating an unpredictable market, and for the last 16 years, Dori’s acumen has been instrumental in that,” said Wagner in a statement provided to IndieWire. Mark and I couldn’t hope for a better team to steward the company through this next exciting chapter.”

In his own (characteristically playful) statement, Bowles — who moonlights as the frontman for rock ‘n’ roll band The Martinets — added: “I couldn’t think of a better person to co-head Magnolia Pictures with than Dori. Her intelligence, integrity, energy and grace, not to mention some of the most impressive hair in the industry, make her supremely qualified to help grow the company to greater heights. We’re excited for what comes next.”

“In true Magnolia form, we see the uncertainty and fluctuation of this moment as an opportunity to evolve and grow the business,” Begley wrote me in statement. “I have tremendous respect for the lifelong integrity and dexterity of this company, and couldn’t be more proud to help guide us through the next phase in partnership with Eamonn, the rock solid foundation of Magnolia, and one of specialized film’s greatest champions.”

Magnolia Pictures co-CEO Dori Begley
Magnolia Pictures co-CEO Dori Begley

This is good stuff happening to good people, but some may wonder what that future looks like for a company that hasn’t delivered a major hit in quite some time. Magnolia released the searing Romanian documentary “Collective,” which earned Best Documentary and Best International Feature Film nominations at the 2021 Oscars, but you’d have to go back even earlier to the likes of 2018’s “RGB” and 2017’s “I Am Not Your Negro” to find anything that garnered a measure of commercial success. Its last serious box-office draw was Palme d’Or winner and Japanese Oscar nominee “Shoplifters,” which grossed $3.3 million in 2019.

That reading would assume that the arthouse business is solely defined by box office and awards, but over the last two decades Magnolia accrued an impressive catalogue of provocative and acclaimed films. It includes revered documentaries like “Jiro,” “Man on Wire,” and “Capturing the Friedmans” as well as first-rate genre work like Bong Joon-ho’s “Mother” and “The Host.” All told, Magnolia has over 600 films in its library — less than the voluminous offerings some overeager buyers accrued in recent years, but impressive considering the emphasis on quality. A representative from the company told me that the last three years (aka the COVID ones) have been among the most profitable in its history.

“Jiro Dreams of Sushi”<cite>Magnolia Pictures</cite>
“Jiro Dreams of Sushi”Magnolia Pictures

Libraries are key in the monetization game. All streamers pay licensing fees to fend off the constant subscriber churn, and Magnolia’s eclectic curatorial approach pays off in bits and pieces thanks to the consistency of its aesthetic standards. It won’t have the insane valuation that led Amazon to pay $8.8 billion for MGM, but what does? (And that deal has yet to justify itself for Amazon.)

Another boost for Magnolia this week came via Disney’s second-quarter earnings report. As I wrote last year, Disney has become one of the specialty world’s biggest benefactors thanks to lucrative output deals that Hulu maintains with several buyers in addition to its in-house Searchlight. On the Disney earnings call this week, CEO Bob Iger revealed that Hulu would get its own tile on Disney+ in the U.S., instantly amplifying the potential audience for movies that appear there. (That’s also the first step in its path toward buying out Comcast’s stake in Hulu worldwide.) While these output deals can be fickle (sorry, black-and-white movies!), they provide serious financial leverage for companies looking to make competitive offers.

Now, Magnolia heads to Cannes alongside with renewed confidence in its position within the streaming ecosystem. There are a handful of big acquisition targets in the Cannes official selection thanks to Todd Haynes’ “May December” and the Jude Law/Alicia Vikander thriller “Firebrand,” along with juicy genre offerings like Takeshi Kitano’s gay samurai epic “Kubi” and intriguing new work from some of the best European directors of the past the 40 years, including Aki Kaurismaki (“Fallen Leaves”) and Ken Loach (“The Old Oak”). So who knows? Maybe a few of highlights will follow me home after all.

This is a funky time for the content business, but there’s a promising contrast in smaller companies with rarefied strategies. The Magnolia situation suggests opportunity for any company with a solid library, good taste, and a steady habit of ingesting new work. Other film entities exploring sales might consider the alternative to chasing a huge deal: Batten down the hatches, make the most of what you have, and keep building it out for whatever the unpredictable future might bring.

As usual, I welcome feedback to this week’s column:

Browse earlier installments here.

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