Mike Larocca and Michael Schaefer‘s Department M has closed a transaction to acquire a majority stake in multi Oscar- and Cannes Palme d’Or-winning studio Neon.
The deal, in addition to infusing capital to Neon’s expanding operations, allows the Santa Monica, CA studio to launch Neon TV, creating a more significant mini-studio that already counts an international sales arm and a lucrative, award-winning feature library. Earlier today, Deadline reported that there’s buzz of Neon launching a UK distribution arm a la Lionsgate. Department M is already supplying development- and production-ready projects as part of the new deal.
Neon founder Tom Quinn will remain CEO. Department M partner Schaefer will become Neon’s Chief Content Officer, while Department M partner Larocca remains at Department M and joins the Neon board. Jeff Deutchman continues as President of Acquisition, Production and Development for Film and Carina Sposato joins as EVP Television, both reporting directly to Schaefer.
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We told you during the European Film Market in February that Neon was in talks with Department M for a capital injection. Neon had been searching for an additional investor for some time; there were rumors a few years ago that Steven Rales’ Indian Paintbrush was kicking the tires.
The new deal will keep long-standing Neon backers The Friedkin Group as significant shareholders and board members. The Friedkin Group, led by Dan Friedkin, is also an owner of indie feature financier 30West.
No financial figures for the Neon-Department M deal were disclosed.
Both Neon and Department M already have separate partnerships with Qatar. The Qatar Film Committee has a slate deal in place with the former, and a biopic production pact with the latter.
Film and TV producer Department M was launched in 2024 by AGBO vet Larocca and New Regency’s Schaefer. They were behind the remake of the 1992 thriller The Hand That Rocks the Cradle, which streamed on Hulu last year. Upcoming for the company is Cary Joji Fukunaga’s Jo Nesbø adaptation Blood on Snow starring Benedict Cumberbatch, Aaron Taylor-Johnson, Eva Green and Ben Mendelsohn.
Neon once again had a fantastic Cannes Film Festival, with Cristian Mungiu’s Fjord winning the studio’s seventh consecutive Palme d’Or as well as the FIPRESCI award. Also, Best Actress went to Virginie Efira and Tao Okamoto’s for the studio’s All of a Sudden. Neon arrived at Cannes this year with six competition titles in place — All of a Sudden, Fjord, Hope, Paper Tiger, Sheep in the Box and The Unknown.
Earlier this year, Neon scored a Best Picture nomination for its Cannes 2025 titles Sentimental Value and The Secret Agent, with the former ultimately winning Best International Feature Film.
