A24 Pushes Past the Indie Fringe With a $200 Million Gamble on Elden Ring
For more than a decade, A24 operated as the boutique darling of American cinema, cultivating a devoted demographic that treated daring directorial visions like sacred artifacts. Directed by Alex Garland and starring Kit Connor, the massive project carries a towering $200 million price tag. It represents a leap for an art-house giant that previously built its reputation on low-risk, high-reward psychological horror and idiosyncratic comedies.
The firm currently finds itself in a transitional phase: it has moved past its days as a modest independent shop fighting the establishment, yet it has not transformed into a massive conglomerate scaling up to join the major studios. Yet, financial reality suggests a studio firing on all cylinders. This year will go down as A24’s most profitable ever. A wave of diverse hits, highlighted by the Gen Z horror breakout Backrooms and the Elizabeth Holmes documentary You Can See Everything, has pushed the studio past the $500 million mark at the domestic box office for the first time.
Balancing Record Revenues With Sky-High Valuations
That momentum has naturally stoked persistent mergers and acquisitions chatter across Los Angeles. Founders David Fenkel and Daniel Katz have carefully protected their brand equity since launching the studio in 2013, rejecting overtures from deep-pocketed buyers like Apple and Sony. Following a mid-2024 fundraise led by Josh Kushner’s Thrive Capital that valued the company at $3.5 billion, industry insiders remain split on whether those numbers reflect market realities.
“If they’re ever going to monetize, this is the time to do it,” one high-flying mogul says of A24.
Skeptics at rival studios argue that the lofty valuation demands aggressive expansion, pointing to the fate of boutique labels swallowed by major conglomerates. “They’ve got a great brand, but in an acquisition scenario, we’ve seen that brands don’t really survive. Look at what Disney did to FX and 20th Century Fox,” another top executive noted, emphasizing the mounting pressure to grow into the valuation they chased.
To meet those financial expectations, A24 has steadily widened its aperture. The television division has begun producing serious hits, moving from HBO’s Euphoria to Peacock’s Crystal Lake, HBO’s Neighbors, and Apple TV’s Margot’s Got Money Troubles. Meanwhile, the studio’s physical assets now include New York’s Cherry Lane Theatre and a $75 million investment from Google DeepMind aimed at exploring filmmaking artificial intelligence tools.
When Art-House Sensibility Meets Four-Quadrant Math
Yet, scaling up production budgets has proven to be a delicate tightrope walk. Last year’s $50 million dice rolls—Ari Aster’s Eddington and Dwayne Johnson’s The Smashing Machine—stumbled at the box office. Those misses were comfortably absorbed by the performance of Backrooms, which became the studio’s highest grossing film ever with $400 million globally against a $10 million budget, alongside the Zendaya and Robert Pattinson offbeat relationship comedy The Drama, which grossed $134 million globally.
Those windfalls cushioned the red ink from underperforming projects like Glen Powell’s action comedy How to Make a Killing, Hugh Jackman’s revisionist take The Death of Robin Hood, and Chris Rock’s dramedy Misty Green. Because A24 relies on regional distributors for international rollouts, it mitigates overseas losses while missing out on the outsize foreign windfalls of titles like Backrooms. To address international distribution, Fenkel and Katz have spent the past year traveling the globe in search of local-language partners.
Moving toward $100 million-plus budgets changes the fundamental arithmetic of filmmaking for a studio known for polarizing, niche storytelling. Classic releases like Hereditary, Uncut Gems, and Backrooms secured low CinemaScores because their modest budgets never required broad consensus.
“When you get into these price tags, you have to talk four quadrants. A24 didn’t build their brand on four-quadrant films. They chased two quadrants very hard. At $100 million-plus budgets, you can’t ignore Oklahoma and Indiana,” Travis Knox, associate professor of producing at Chapman University, told Variety.
As A24 preps upcoming big-budget swings like the $35 million slasher Slayground alongside Elden Ring, the core tension remains untouched. The company relies fundamentally on the drawing power of its label to attract younger demographics to cinemas and streaming services while steering clear of any perception of corporate sellout. As Knox observed, a direct corporate buyout by a tech giant like Amazon would automatically alienate the audience. For now, Fenkel and Katz are charting a high-stakes middle path, attempting to scale a billion-dollar empire without losing the independent soul that built it.
