Podcast Summary: The Town with Matthew Belloni

Episode: The 'Smashing Machine’ Bomb and A24’s Big-Budget Burden

Date: October 6, 2025
Host: Matthew Belloni (A), with guest Lucas Shaw (B, Bloomberg)
Producer: Craig Horlbeck (C)

Episode Overview

This episode explores the challenges facing indie powerhouse A24, following the box office failure of The Smashing Machine, an expensive Dwayne Johnson drama. Host Matthew Belloni and guest Lucas Shaw analyze A24’s ambitious pivot toward bigger, riskier films, dissect the pressures of private equity-backed growth, and discuss whether the company can sustain its identity—and independence—as a premier tastemaker. They also discuss the current state of the indie distribution landscape and the life cycle of indie film studios.

Key Discussion Points & Insights

1. A24’s Brand and Evolution

• A24’s Reputation: Known for "quality, boundary-pushing, cool" indie films with a unique brand identity (00:20).
• Quote: "You hear A24 and you kind of know what it’s going to be. Quality. Boundary pushing. Cool even." (A, 00:20)
• Private Equity Backing: From the start, A24 was a private equity play, initially backed by Guggenheim Partners and later raising more capital, reaching a $3.5B valuation (01:29).
• Expansion Strategy: After more funding, A24 shifted to financing and producing bigger-budget movies, aiming to create hits with higher risks and potential rewards (02:39; 07:32).

2. The ‘Smashing Machine’ Flop & Box Office Aftermath

• Box Office Numbers: Despite a reported $50-70M budget, The Smashing Machine opened to just $5.9M domestic (05:41).
• “You do not want to open a Dwayne Johnson movie to $5.9 million.” (A, 05:45)
• Marketing & Audience Issues: Taylor Swift's concert film took premium screens, but the audience overlaps were minimal; The Smashing Machine skewed 70% male vs. Swift’s 90% female demo (05:45).
• CinemaScore: Received a B-, as audiences expecting Rock’s typical fare got a gritty, downbeat drama (06:32).

3. Risks of Scaling Up: Lessons from Film History

• Previous Hits vs. Recent Misses: While Civil War ($50M budget; $120M+ gross) and Materialists were successes, movies like Eddington and Death of a Unicorn tanked (09:01).
• Historical Precedents: Belloni draws parallels to studios like Overture Films and Miramax, both of which faltered after growing budgets (10:10).
• Is A24 Overextending? The panel debates whether A24 is following a dangerous industry pattern or simply adapting (10:46).

4. The Economics & Investor Pressure

• High Valuations & Growth Pressure: Having reached a $3.5B valuation, A24 is compelled to pursue growth, create a library, and secure global rights (07:32; 08:40).
• Quote: “Their valuation when they were just a distributor was also inflated...not a lot of big commercial hits.” (B, 08:06)
• Apple Deal: A24’s partnership with Apple provides financial cushion (10:46; 11:12).
• TV Division: TV helps stabilize income but lacks blockbusters’ upside (11:12).

5. Indie Landscape & New Entrants

• Distribution Contraction: Aside from A24 and Neon, art house/indie distribution is shrinking as studios focus on blockbusters and streamers (15:54).
• Brand as Asset: A24’s coolness (e.g., logo hats) and brand identity attract urban, young tastemakers—"That's not easy to build over 10 years." (A, 15:35)
• New Players (Mubi, RO K): Despite risks, new distributors are entering, perceiving gaps in the market as major studios reduce output (16:39–18:19).
• Vanity & Opportunity: Shaw suggests vanity and love of movies—plus the occasional profitable "exit"—continue to draw new companies (17:15).

6. Changing Exhibition & Market Windows

• Fewer Movies in Theaters: Noted decline in theatrical releases leaves gaps in the calendar ripe for indies or event programming (18:19).
• Theatrical vs. Streaming: Despite claims from streamers like Netflix (“Ted Sarandos tells us that audiences have largely moved beyond seeing movies in theaters.”), some indies like Materialists can break through ($100M gross) (20:14–21:12).

7. Strategic Outlook for A24

• Boardroom Anxiety: If on A24’s board, “You're a little worried” about returns and strategic fit (21:32).
• Difficult Transition: Moving from consistent singles to swing-for-the-fence strategy is risky, requiring bankable stars and bigger commercial hits (21:36–22:19).
• Is ‘Indie’ Still in the DNA? As budgets grow, A24 risks losing its original ethos (22:20–22:30).
• Exit Strategy? High valuation may hamper the prospect of a sale. Apple is the logical (but not likely) big-money buyer; otherwise, selling to a studio would undermine independence at an unprecedented price tag (25:45).

Notable Quotes & Memorable Moments

• On A24’s Brand:

  • "A company where 30-something urban dudes want to wear your hat... That’s not easy to build over 10 years." (A, 15:35)

• On the ‘Smashing Machine’ Failure:

  • "It’s a giant disaster. You do not want to open a Dwayne Johnson movie to $5.9M." (A, 05:45)
  • "People who went to a Dwayne the Rock Johnson movie and got a very gritty wrestling drama where he doesn’t even look like himself were disappointed." (A, 06:32)

• On Indie Studio Life Cycles:

  • "Is the idea of an indie studio growing and increasing their budgets...kind of antithetical to the original mission statement?" (C, 22:20)
  • "There’s a kind of natural life cycle to an indie studio. Right. It’s like 10 to 15 years. If you’re so successful...at a certain point, the budgets get bigger, the bets get riskier..." (C, 22:30)

• On the Modern Distribution Landscape:

  • "If you have a starting one of these companies doesn’t cost you that much. I also think there’s a feeling that there’s not enough movies, like you could get away with arguing that there are not enough movies being released right now." (B, 17:15)
  • "If the studios are going to back away and if there are going to be fewer big titles, there are going to be weekends where there are opportunities." (A, 18:19)

• On A24’s Valuation and Potential Sale:

  • "A24 would want a sale of more than 10 times [Summit’s]…and it has never released Twilight." (B, 23:52)
  • "The movie business is so risky that as a public company, seems insane to me." (B, 25:32)
  • "They need the strategy they’re working on right now to work in a big way to ever think that they’re going to get someone to buy them at a premium to their most recent round." (B, 26:00)

Important Timestamps

| Timestamp | Segment/Topic | |-----------|------------------------------------------------| | 00:20 | A24’s brand identity and cool factor | | 05:41 | The Smashing Machine box office disaster | | 07:32 | Why A24 shifted to bigger films | | 10:10 | History of indie studios overextending | | 15:35 | A24’s “coolness” and brand power | | 16:39 | A24’s output deals (HBO, Apple) | | 17:15 | New indie distributors and market gaps | | 18:19 | Fewer movies in theaters = opportunities | | 21:32 | Boardroom anxieties about A24’s strategy | | 22:20 | Indie growth vs. original mission statement | | 23:45 | A24’s sale prospects vs. Summit Entertainment | | 25:32 | Why public company status is unlikely | | 26:00 | Pressure for strategy to produce ‘big wins’ |

Flow & Tone

Belloni and Shaw maintain an insider tone—wry, data-driven, and laced with Hollywood in-jokes and candid skepticism. The conversation is both analytical and conversational, peppered with industry lore and war stories.

For New Listeners

This episode gives a revealing, critical look at A24’s fork-in-the-road moment, explores the economic and creative tensions in Hollywood’s indie space, and shines light on why even “cool” studios must grapple with the pressures of scale, branding, and investor expectations. If you're interested in Hollywood’s evolving landscape, business strategy, and what makes an indie studio tick—or almost topple—this one’s for you.