Several years ago, the Hollywood producer Robert Simonds Jr. began thinking about how a movie studio for today’s age â€" with the ascendance of China and a dizzying array of distribution channels â€" should look.
Now Mr. Simonds and his backers, including TPG Capital and the Chinese investment firm Hony Capital, think they have the answer.
The group plans to announce on Monday the formation of a studio with ambitions to fill in a space abandoned by bigger rivals. Its focus: $40 million movies featuring big-name stars, the kind of comedies and dramas that have lost some currency in Hollywood, displaced by giant summer spectacles. The group’s goal is to invest more than $1 billion in new projects over the next five years.
Propelling the creation of the as-yet-unnamed studio are some of the biggest trends reshaping the film industry. Among them is the desire to tap into China, where a growing appetite for new movies has drawn courters from across Hollywood, including the likes of Mr. Simonds and Jeffrey Robinov, the former head of Warner Bros. who is setting up his own shop.
Another is the shift of big studios to blockbusters aimed at a few windows throughout the year, leaving movie theater owners scrambling to fill seats the rest of the time.
Mr. Simonds and his backers are betting that they have solved both issues. By lining up Hony as an investor, they have formed close ties to the Shanghai Media Group, one of China’s biggest entertainment companies and a key to the world’s fastest-growing movie market.
But even with capital from Hony and TPG, the new studio must still battle better-funded rivals with much bigger marketing budgets. And with only up to 10 movies each year, the company has less room for error if a big number of its films flop.
To compete with its larger competitors, the new studio has forged an unusual distribution agreement with four of the biggest movie theater chains in America, including AMC Theaters and the Regal Entertainment Group, guaranteeing that up to 10 slots of the company’s features will play nationwide each year.
“Significant global demand, coupled with digital distribution, has created a great opportunity for a new studio that’s positioned to address those needs,†William McGlashan Jr., the head of TPG’s growth fund, said by telephone.
The start-up has drawn a number of prominent backers who will sit on its board, including David Bonderman, a founding partner of TPG; John Zhao, the chief executive of Hony Capital; Gigi Pritzker, the Hollywood producer behind “Ender’s Game†and “Driveâ€; and Frank Biondi, the former chief executive of Viacom and Mr. Simonds’ father-in-law. Thomas McGrath, a former Viacom executive, is the new studio’s chief operating officer.
Leading the new effort is Mr. Simonds, whose production credits include Adam Sandler movies like “Happy Gilmore,†and Steve Martin’s reboot of “The Pink Panther.†To him, the modern film business and its focus on big-budget Hollywood “tentpole†pictures has left a gaping hole for traditional star vehicles, which may cost $40 million, but rarely lose money.
It was a topic that Mr. Simonds and Mr. McGlashan, classmates at Yale, began discussing over late-night drinks at their alma mater two and a half years ago. The two men then agreed to start a studio focused on those movies, quietly holding discussions with stars about potential showcases for their talents.
“We’re doing movies that are designed to play to a star’s signature strength,†Mr. Simonds said.
One crucial job was lining up the financing, a task aided by the investment banker Joseph Ravitch of the Raine Group. Though the company has secured financing from JPMorgan Chase and Bank of America Merrill Lynch, Mr. Simonds and his team decided that they needed a strategic partner â€" leading them to meet with officials from Hony over lunch about nine months ago.
Hony represented not just deep pockets, with roughly $7 billion under management, but also close ties to Shanghai Media, which has forged deals with other American studios like Walt Disney to develop branded movies for the Chinese market.
“We wanted this to be blue-chip, strategic money, and not just some guy writing a big check,†Mr. Simonds said.
Hony and Shanghai Media warmed to the idea of a partnership, eventually sending a 15-person team to Los Angeles to help develop content that would work for the Chinese market.
Just as important, the new studio turned its eyes to setting up its distribution network, freeing itself from the big studios’ release restrictions and expensive fees. Lining up guaranteed slots on movie screens around the country could also help persuade movie stars to take a chance on the company.
Despite emphasizing the new company’s independence, however, Mr. Simonds said that the company would also work with traditional studios, many of which he contended have shown interest in helping produce star vehicles.
“We’re trying to be everyone’s friend,†he said.
