A24, Angel Studios & the Art of Inflated Valuations
Bubble trouble: Two indies with infinite hype face the reality of economic gravity
I offer analysis for paid subscribers every other Thursday. I wrote about why Paramount’s risky playbook could work, covered 7 sleeper hits of the Streaming Wars; and explored why animation continues to make bank and IP dominates the box office.
In my last article for The Ankler, I noted that a few new distribution companies (A24, Angel Studios and Mubi) had eye-popping higher valuations compared to traditional studios like Paramount, especially when looking at what David Ellison (and his father) paid to take control of all of Paramount Global.
Whenever I see valuations that high, I don’t trust them.
In layman’s terms, this bubble might be getting ready to pop. If there’s anything I love more than puncturing inflating bubbles, I don’t know what it is. Remember when I warned that studio lots were an inflating bubble? Take a gander at this Elaine Low headline from a few months back.
But also remember the hype machines of Esports, celebrity production companies and sports docs? Pop, pop, pop.
I bring these bubble questions up because two of very, very, very highly valued companies have been in the news recently. I speak of Angel (formerly known as Angel Studios, which was formerly VidAngel), which was valued at $1.6 billion when its SPAC deal closed just over a month ago, and A24, which nabbed a highly-publicized $3.5 billion valuation last year (when Josh Kushner’s Thrive Capital pumped in $75 million). Again, that A24 valuation is nearly half what Skydance and the Ellisons paid to gain control of all of Paramount Global — a company with some challenges, sure, but also a deep bench of significant assets. (Yes, Paramount Global as a whole is still worth over $30 billion, but considering Disney and Comcast said Hulu is worth over $27 billion, it still seems like a steal to me.)
So, how has 2025 gone for A24 and Angel Studios?
Angel went public… and its stock has roughly dropped in half.
Plus, Angel’s recent films (fantasy comedy Sketch and sports drama The Senior, which stars Michael Chiklis) both failed to break $10 million in total box office grosses.
A24 had a glowing New Yorker profile (that referenced a previous Ankler article of mine!)
But A24 also just had a string of box office misses, including a huge flop (The Smashing Machine), a disappointment (Eddington) and a miss (Ne Zha 2’s English-language dub)…
Given all that, it’s time to check back in on these buzzy companies. Frankly, now that we know exactly how much Angel is losing, it should make us question a lot of these other production company valuations. To be worth what they claim, A24 and Angel need to make lots of hit films, and I just don’t see the data that they do that.
In this article, I’ll get into…
Angel’s grim (and worsening) financials — the devil’s in the details
The film that drove Angel’s rise and why it was an anomaly
What’s unique about Angel’s streamer, what’s really driving its rapid growth and whether its unusual model can ultimately pay off
The good news for A24: Its growing share of the box office
The bad news: The remarkable consistency — and unremarkable dollars — of the company’s box office outcomes
Why it’s seeing higher-profile and ever-pricier flops (Smashing Machine)
The projects in the pipeline that can put A24 in a much stronger position
What both companies need to turn the tide