NEWS ANALYSIS — Helios and Matheson Analytics (HMNY), the cash-poor corporate parent of theatrical ticket subscription service MoviePass, keeps swinging for the fences. Now it wants to buy a film production company.
HMNY May 30 announced it has acquired the option to acquire indie film house Emmet Furla Oasis Films (EFO Films), whose titles include Lonesome Survivor, Broken City and End of Watch, among others. If completed, HMNY would co-0wn with EFO new business subsidiary MoviePass Films.
With HMNY’s stock trading around 40 cents per share, the deal is another corporate Hail Mary with EFO’s Randall Emmett and George Furla serving as co-CEO’s of the new company.
HMNY would own 51% of MoviePass Films, with EFO Films owning 49%. HMNY CFO Stuart Benson would serve in the same position at the new venture, with Ted Farnsworth, CEO of HMNY, serving as chairman of the board.
Mitch Lowe, CEO of MoviePass, would have a seat on the board.
“Since we began disrupting the movie industry with our unprecedented low cost movie theater subscription service, MoviePass, we have envisioned owning and developing our own content and using the power of our several million subscribers to bolster the success of our films,” Lowe said in a statement. “I believe this partnership with EFO Films will accelerate those efforts.”
Indeed, MoviePass cut its teeth in the content business earlier this year acquiring rights to American Animals with Orchard, and John Travolta’s Gotti biopic — the latter after Lionsgate dropped the film from its release schedule. Both movies are slated to be released in June.
How owning a film production company will help MoviePass, whose loss-leader business model enables subscribers daily access to a theatrical screening for $9.95 a month, is anyone’s guess.
With more than 2 million subscribers, MoviePass is a hit with consumers and a fiscal goldmine for exhibitors. But the business is burning through more than $21 million on a monthly basis, which left HMNY with about $15.5 million in cash, according to its most-recent fiscal filing.
Hedge fund Citadel Securities apparently believes the hype. It acquired a 5.4% stake in HMNY May 29, for about $1.7 million.