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Legion M, the first fan-owned entertainment company, announces seventh round of fundraising

Paul Scanlan, Co-Founder & CEO of Legion M, joined The Final Round to discuss the company's seventh round of funding and his outlook for Hollywood amid COVID-19.

Video Transcript

MYLES UDLAND: All right welcome back to The Final Round here on Yahoo Finance. Myles Udland with you in New York. Well Legion M is a fan-owned entertainment company, and CEO Paul Scanlan joins us now to discuss. So, Paul, let's start with the concept here that I'm not sure many of our viewers are familiar with. Through the JOBS Act regular investors can buy a piece of businesses that go through this route, so who can sign-- who can invest? How much are they investing? What am I getting for this investment? And then we'll go from there.

PAUL SCANLAN: Sure, absolutely. Well thank you for having us. Yeah, so Legion M, we're the world's first fan-owned entertainment company, and what that means is we're literally owned by a fast-growing and energized community of entertainment fans. And we're open because of the JOBS Act and the new securities regulatory that they allow.

We can let anyone invest. We're a startup, and anyone can invest in Legion M. The minimum investment's only $100, and we tell everyone, because we're a startup, this isn't a safe place for your retirement investments and things like that. But it is an interesting opportunity for some potentially high upside if we're successful. I mean, statistically most startups the odds are stacked against us.

But we believe in what we call it the "immeasurable power" of fans and that having a fast-growing and tight knit community of entertainment fans as our co-owners and shareholders gives us power in the industry and the entertainment industry that other people don't have. They're not only our built-in audience when we release our projects, but they're also our guiding light when we're choosing projects.

And so yeah, we started about four years ago. We've raised about just over $10 million, and yesterday we introduced our seventh round of investment.

MYLES UDLAND: So let's talk about some of the projects you guys have been involved with over the last four years. Where has this, I guess, taken you that you maybe wouldn't otherwise have planned on going in terms of investing in different things? And you just opened a new round, so what right now, given the environment with most production shut down, starting up soon, but has been shut down for a while, where do you think things are headed as we get through the pandemic here?

PAUL SCANLAN: Yeah, absolutely. Well, I mean we're really proud of what we've accomplished so far. When we first started, it was me and my co-founder Jeff Annison. And this isn't our first startup. We started another company in the entertainment industry that was also very disruptive called MobiTV, and that was one of the first streaming pioneers. We won an Emmy from the Television Academy for introducing a whole new category in entertainment.

And this time around we're uniting fans to co-own the company with us. And we've been really grateful for the reception that Hollywood has had. So we've been involved in some amazing projects starting with Colossal was one of our first projects starring Anne Hathaway and Jason Sudeikis, which if you haven't seen it, I highly recommend it. And what we like about that film is that it was a great example of the types of projects that Legion M wants to be known for. It's a wildly original idea, a very high-end, successful film in the independent space, but probably not a film that would find its path in a traditional studio organization.

And so but we moved on from that. We did a really interesting film called Mandy starring Nicolas Cage, directed by Panos Cosmatos. We've had multiple acquisitions, so we not only see our community as a way to support our projects, but as I mentioned, we built the platform so that they can guide us.

And so we go to film festivals, which are basically film markets, and we allow our community to play a game called film scout, where they get to be a film scout at a film festival. Even if they're not there, they can still play from home. And that gives us a wealth of information and data. It's a game. It's like fantasy sports for film buffs.

But so we bought two films out of Sundance or gotten involved in two films out of Sundance, one we released earlier or last year called Memory: The Origins of Alien, which is a really amazing documentary about how Alien the movie came together and the creative forces behind it.

And then this year we're teamed up with a company called Bleecker Street to release our film scout winner for this year. It's a movie called Save Yourselves, which we have unfortunately, you had to postpone the box office or the theatrical release because of the pandemic. But we're still excited to release it. We're going out now in October, and we'll do a limited theatrical release with what's VOD.

And we had-- you asked about how are we impacted by the pandemic. We had another movie that we're really proud of called Jay and Silent Bob Reboot that we did together with Kevin Smith.

And again, we asked our community if we could work with any director or talent in Hollywood. Who do you want to work with? And Kevin Smith was regularly at the top of that list, so we know Kevin. We teamed up with him, and he was flattered and excited that we could go do a movie together.

That movie ended up shattering box office records right before the pandemic hit, so we're pretty fortunate in that we got that movie out. We were able to finish its theatrical release and go to VOD. Its last theater showings I think were in January, so we dodged a bullet there.

And we have another film called Archenemy that we just started talking about which wrapped the shooting in January. So we were thankfully in post-production when we all went under quarantine, so we've been dutifully working on that film and finishing it up. And now we're finding that because of the lack of production, and that there hasn't been the opportunity to go on set, that there's not a lot of content on the marketplace right now. So we're excited that we've got two films, two finished films that we'll be releasing later this year.

- Yeah, Paul, speaking to that point, we saw Disney announcing that they're going to be releasing Mulan for 30 bucks, but you would be able to bypass the theatrical release, which in my mind is a little bit disappointing. But that seems to be the new model that's emerged.

I know maybe for the pandemic, you also teamed up with Endeavor, I think, in February, and you struck up this content deal. Do you feel like Hollywood is more amenable to these sorts of new, flexible ways? Over the last couple of months, do you feel like your phone has been ringing off the hook? There seems to be more flexibility here. There's more receptiveness to companies like yours?

PAUL SCANLAN: Yeah, I'll be honest. We're really grateful that we are still a pretty nimble and fast-moving startup that we're able to adapt. The pandemic has affected the entire industry, and a lot of that has been negative.

But there's also some positives. And in our case, we've been able to shift our priorities really quickly, and that announcement with Endeavor Content, which includes a lot more projects now in our television slate, because television as you may have heard, especially through the streamers, is that it's at a heyday right now.

So we've got with Legion M one of the things that's always been really important to us is that we have a diversified slate, and that so that we're not just doing movies. Our community, we watch and love content across the board, and when we look at what is the disruptive power of Legion M and how can it coexist in a market play-- ever changing marketplace.

The one thing that will be true today as it will be 50 years from now, no matter how we're consuming content, is that the audience, they're the ones that matter. They're the ones that pay for the content. They choose what to watch. They either buy tickets at the theater, or they subscribe to a streaming service. And so the more our community, more community we have in our shareholder base, the more impact we'll be able to have.

And we've seen this already. In the four years that we've been in business, we've raised over $10 million. We have over 25,000 investors in our community today. And we've seen firsthand the power of that, and our long term goal is to unite one million entertainment fans to co-own the company.

And so you think-- if you think of that, the power-- I mean, we're more bullish now on our prospects than we've ever been. Mostly just because from the starting community that we have today, 25,000 investors and over 100,000 members. We've just seen the power of that and what that means in the industry and the reception that we get when we release projects.

MYLES UDLAND: All right, Paul Scanlon, Co-founder and CEO of Legion M. Thanks for joining the program, and we'll talk soon.

PAUL SCANLAN: All right, Thank you. Appreciate you having me.