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Russo brothers’ company gets investment from game maker

AGBO, the film and TV production company founded by “Avengers: Endgame” directors Joe and Anthony Russo, has secured a minority investment from a Tokyo-based video game maker, as firms pour money into the red-hot entertainment content space.

The game developer, Nexon Co., is paying $400 million for a 38% stake in AGBO, valuing the downtown Los Angeles-based company at $1.1 billion, the firms said Wednesday.

Nexon, best known for its massive online free-to-play games, is a major player in Asia, but it has been flying under the radar in the U.S.

The investment in AGBO is part of a strategy to accelerate Nexon’s move into the film and TV business and build its global profile, including with American audiences. Nexon’s film and TV offices are based in Beverly Hills.

On the Nexon side, the deal was led by Nick Van Dyk, an entertainment industry veteran Nexon hired last year to lead its recently formed film and television division. AGBO Chief Executive Jason Bergsman, who knew Van Dyk when they were both at Walt Disney Co., reached out and the two met multiple times during the summer and fall, eventually resulting in a deal.

“It quickly became clear to the both of us that a similar mindset with respect to the evolution of global entertainment franchises could provide really favorable grounds for collaboration between our two companies,” Bergsman said in an interview.

The deal will boost AGBO’s ability to develop and produce new franchises, extend its intellectual property with interactive entertainment and co-finance projects.

AGBO is looking at Nexon games that it could develop into entertainment franchises. Nexon may also dig into AGBO’s intellectual property to grow new games, the executives said. AGBO co-founder and Russo producing partner Mike Larocca said the companies expect to announce specifics of how the companies might collaborate in the coming months.

“It all feels organic,” Larocca said. “There’s nothing forced.”

Nexon has the option to invest an additional $100 million in AGBO, if requested, in the first half of this year.

But Van Dyk, who previously held executive roles at Disney and Activision Blizzard, said it was important for AGBO to continue to be creatively independent. Nexon was comfortable with that arrangement because the two sides agreed on their vision for creating popular franchises, he said.

“There are plenty of artist-led companies that do tiny, little obscure arts films whose purpose is to challenge and disturb audiences, and there’s certainly a role for them in the media business,” Van Dyk said. “But when you have people who view franchise IP and universe creation in a very similar way, we’re totally comfortable letting AGBO chart its own creative course. “

Hollywood is in the midst of a flurry of deals as investors and companies try to get an edge on the competition for content as the audience rapidly consumes films and series on streaming services. The demand has resulted in some astronomical valuations.

LeBron James and Maverick Carter’s SpringHill Co. last year secured a private equity deal valuing their venture at $725 million. Reese Witherspoon’s Hello Sunshine sold to a Blackstone-backed entity valuing the “Big Little Lies” shingle at $900 million.

On Tuesday, Will Smith and Jada Pinkett Smith sold a minority stake of their company Westbrook Inc. to the Blackstone-funded firm called Candle Media, which is run by ex-Disney executives Tom Staggs and Kevin Mayer.

The Russo brothers are well-positioned for Hollywood’s franchise-obsessed era. They’re best known for directing some of the most popular movies in the Marvel Cinematic Universe for Disney, including “Captain America: Civil War,” “Avengers: Infinity War” and “Avengers: Endgame.” The latter, released in 2019, grossed $2.8 billion at the global box office. They also directed the much smaller 2021 Tom Holland drama “Cherry,” released on Apple TV+.

Founded in 2017, AGBO is known for offerings such as the Netflix action movie “Extraction,” starring Chris Hemsworth. A sequel is on the way. It’s also the company behind the upcoming Chris Evans-Ryan Gosling big-budget action thriller “The Gray Man,” directed by the Russo brothers for Netflix.

Nexon’s game franchises include “Dungeon&Fighter,” which has grossed more than $18 billion to date, according to the company. It also publishes the South Korean game “MapleStory” and developed the “KartRider” racing game series. The company in 2019 acquired a game studio in Stockholm, in an effort to expand beyond Asia.

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