New Hollywood player STX Entertainment hopes to grab spotlight at CinemaCon convention

At the CinemaCon conference in Las Vegas this week, the major Hollywood studios will show off their would-be blockbusters in schedules packed with celebrity appearances and new footage from upcoming action sequels and superhero movies.

They will be joined by the new kid on the block, 2-year-old STX Entertainment. The Burbank-based upstart is hoping to grab some of the spotlight at the convention while confronting skepticism that it can succeed where others have failed.

Armed with hefty funding from China and Silicon Valley, STX has a roster of respected executives and a bold mission to make the kinds of movies the six major studios don’t focus on anymore — films that cost $20 million to $80 million to make and don’t rely on well-known stories and comic book characters.

STX executives say that gives them a rare opportunity to capture a little-tapped market of moviegoers who won’t flock to the latest Marvel or DC Comics film. But it remains to be seen whether the company can find a steady string of hits and avoid the struggles of companies such as Revolution Studios and Relativity Media, which is emerging from bankruptcy protection.

Without the benefit of reliable franchises, STX must bank on star power and the quality of the movies it makes — a calculation far less predictable than a superhero sequel or another “Transformers.”

“The question is, is it going to be the next Relativity or the next Lionsgate?” said Jeff Bock, an analyst with the box-office tracking firm Exhibitor Relations.

STX Motion Picture Group Chairman Adam Fogelson, who ran Universal Pictures until he was ousted in 2013, says his studio has the experience to succeed in a tough market.

“Everyone here has been brought in because they are major studio-trained superstars,” Fogelson said. “I can only imagine how intimidating it would be if we were all truly outsiders. But the fact is, we are insider-trained people with an exciting, fresh point of view about how to build a studio from the ground up.”

Lacking the franchises that pad the bottom lines of Disney, Warner Bros. and 20th Century Fox, STX is betting that it can draw in big stars and put them in the kinds of roles that will hook moviegoers. Its genre tastes span everything from horror to historical drama.

At its CinemaCon presentation Tuesday, STX plans to tout its Matthew McConaughey Civil War drama “The Free State of Jones” and a comedy called “Bad Moms” with Mila Kunis and Kristen Bell, along with multiple other offerings starring the likes of Jackie Chan and Gary Oldman. Other upcoming films include the immigration thriller “Desierto,” produced by Oscar winner Alfonso Cuaron and directed by his son Jonas.

STX has been the subject of much curiosity and debate within Hollywood circles since it was launched by producer Robert Simonds in 2014.

Executives at rival studios, who did not want to be named discussing a competitor, maintained that mid-budget pictures represent an increasingly challenging business. Many of the big studios’ recent attempts to release star-driven, mid-budget movies for grown-ups have fallen flat — the Sandra Bullock movie “Our Brand Is Crisis,” the Bradley Cooper film “Burnt” and the critically acclaimed “Steve Jobs” all fizzled at the box office.

Nonetheless, producers and film financiers have largely cheered the new player’s arrival on the scene.

“Having more options on the distribution side is always a good thing,” said Michael Roban, owner of the Los Angeles film finance and consulting firm MS Media Finance. “When we see a company coming into the marketplace that’s well financed, we’re always rooting for them. They definitely seem to be very aggressive in terms of going after product and trying to be a big player in the industry. Their track record will end up speaking for itself.”

STX’s track record so far has been mixed. The studio has relied on lower-budget movies, like the profitable thriller “The Gift” and horror film “The Boy.” Its November release, “The Secret in Their Eyes,” starring Chiwetel Ejiofor, Nicole Kidman and Julia Roberts, pulled in a disappointing $20 million in domestic ticket sales.

Last weekend’s offering, “Hardcore Henry,” an experimental action movie, grossed $5.1 million in its debut, well below what was expected.

STX has expanded aggressively. The company has swelled to more than 100 employees and plans to spend more than $1 billion each year to make, market and distribute its movies. This year, it plans to put out at least 10 films, including four summer releases. It has brought on studio system veterans such as Chief Content Officer Oren Aviv, formerly of Fox and Disney, and Domestic Distribution President Kevin Grayson, from Universal.

They are attracting talent too. Filmmakers said working with start-up studios like STX gives them an unusual level of access to the executives who decide their fates. Oscar winner James L. Brooks, producer of “Jerry Maguire” and director of “As Good as It Gets,” called his experience with STX “remarkably personal, especially for a company putting out that amount of product each year.” Brooks is producing a coming-of-age drama for the company.

Launching a movie studio is just the beginning, STX executives said. The company is trying to use the movie business to build relationships with big-name actors and filmmakers and enlist them to grow their television and digital video operations with new shows. It’s also building a talent management business and a division to make new virtual reality content.

STX President Sophie Watts said digital media and China’s burgeoning entertainment industry are key areas of focus for the studio. The company has financial backing from TPG Growth, a unit of the San Francisco private equity giant TPG Capital (which has invested in Airbnb and Uber). Chinese investor Hony Capital is a major shareholder as well. Beijing-based Huayi Bros., one of China’s largest film companies, announced an extensive film financing deal with STX about a year ago.

“The goal was always to not just build a film studio, but to build a 21st century global media company,” Watts said. “You need to start with a film studio, because that’s how you attract the best storytellers and the biggest stars in the world.”

When the company started planning its CinemaCon debut more than a year ago, many in the industry wondered whether it would have enough material to host a full presentation. Even CinemaCon Managing Director Mitch Neuhauser was surprised when STX floated the idea of presenting at Caesars Palace.

“I knew the pedigree of STX, because all of their executives have been on the stage at CinemaCon with their previous companies,” Neuhauser said. “We’re thrilled to be able to showcase new companies and their products. But let’s be very honest: There’s an expectation that comes with a presentation in the Colosseum” at Caesars Palace.

As STX tries to stake its claim at CinemaCon, the big studios will tout some of their biggest franchise movies set for the summer. Warner Bros. is flying a slew of A-list talent to Vegas to showcase 11 upcoming films, including the highly anticipated comic book adaptation “Suicide Squad” and the Harry Potter spinoff “Fantastic Beasts and Where to Find Them.”

Paramount’s Monday schedule included bringing J.J. Abrams to the stage to promote the new “Star Trek” sequel he’s producing. Fox is hosting a special brunch with Anna Kendrick to toast its animated film “Trolls,” and Fox Searchlight is even bringing Nate Parker — who was the toast of the Sundance Film Festival this year — to talk about his “Birth of a Nation,” which is expected to be a major force come fall awards season.

Disney, meanwhile, plans to screen “Captain America: Civil War” in full, while Lionsgate is showing exhibitors the entirety of the second “Now You See Me” film. As for Sony and Universal? They won’t reveal the talent they’re flying to Las Vegas in the hope of generating additional buzz.

Still, STX believes that mid-range films can be immensely profitable among the $100-million and $200-million blockbusters. Fogelson points to “Ted,” “Bridesmaids” and “Pitch Perfect” as examples.

“They’re smart guys,” said movie producer John Penotti, president of Sidney Kimmel Entertainment. “They have a broad international view, and that’s good news for the industry.”

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