Hollywood to pitch brands on financing movies and TV shows in new upfront

Longtime Hollywood producer Michael Sugar is launching a new upfront for brands and the entertainment industry—not for product placement or advertising, but to give brands a bigger piece of the action. During “The Way Upfronts,” top-level producers and celebrities will pitch early-development projects, from films, TV shows, documentaries and books, to brand executives to invest in, Sugar confirmed to Ad Age. The quarterly upfront will debut virtually from May 7-8. See all of Ad Age’s 2024 Creativity Award winners here It will be spearheaded by Sugar23, an entertainment company owned by Sugar, an Oscar-winning producer behind films and TV shows such as “Spotlight,” “13 Reasons Why,” “The Knick” and “Collateral Beauty,” among others. “What if a brand owned ‘Ted Lasso’? What if Goldman Sachs or Ally Bank made ‘Shark Tank,’” Sugar said. Sugar, who is leading the effort alongside Sugar23’s Head of Brands Matt Rotondo, declined to identify the brands slated to take part but said they currently represent more than $60 billion of annual production and media spend. Brands are already investing around $25 million in premium entertainment films and shows with Sugar’s company, he said. Last year, Anheuser-Busch InBev launched an entertainment division with the help of Sugar23. Sugar23 also helped launch a TV show in collaboration with Procter & Gamble and Time Studios called “The Turning Point” starring Trevor Noah. Also read: Coca-Cola launches holiday movie series on Amazon Prime Video Although Sugar declined to discuss producers and celebrities pitching projects at The Way Upfronts, several celebrities are on its host committee. Those celebrities include Scarlett Johansson, John Legend, Tom Brady, Elizabeth Banks and Steven Soderbergh. Participants on the brand side will include chief marketing officers, CEOs and chief financial officers, along with representatives from holding companies who will be there looking to invest or support brands in their decision-making, Sugar said. Sugar23 hopes to hold the next quarterly event in person. No date has yet been set. The goal of the upfront is to change the relationships brands traditionally have had with the entertainment industry. “We will take time within those two days to explain that not only can brands entering entertainment create a new marketing opportunity, but that it can create a financial opportunity,” Sugar said. There will be 25 pitches in total and fireside chats from leaders in the entertainment and brand space, according to Sugar. Brands interested in pitches will be connected with the producers and celebrities to discuss the opportunity further. Bookmark our upfront and NewFronts calendar Although financing entertainment properties may seem like a large investment, in many cases, it can cost far less than 30-second TV ads, Sugar said. “The assumption that entry into entertainment costs tens of millions of dollars is a fallacy,” Sugar said. “Many of the models in Hollywood are what’s called cost-plus, which means the streamers pay for the whole budget plus a premium. In many cases, it’s really about getting the project to a place where Netflix or Amazon can buy it, at which point there is no additional financial risk for the brand.” In some cases, brands have invested only $100,000 or less with his company. “This isn’t to say that in every case there’s no opportunity for much more substantial investment, and the size of the investment will impact the size of the return,” he said. Types of investments for each brand can vary. Sugar said he’s had brands pay around $50,000 to make a sizzle reel to then sell to a distributor and other brands have spent multiple millions of dollars to fund productions. Brands can also invest in a script that then gets sold. But in every instance, the goal is to sell a premium entertainment product to a distributor on behalf of brands. Brands will also be able to make money off residuals from the content they’ve sold once it airs. “We’re putting the brands in the position of being a producer and a studio, thereby they participate in the same way that those who traditionally invest in entertainment would,” Sugar said. Upfronts and NewFronts blog Tracking the latest TV and digital ad pitches Read more here Commercial alternatives Sugar23 was founded in 2017 after Sugar departed his longtime role as a managing partner at production company Anonymous Content. He said his company was created to be a more traditional production company with a roster of nearly 400 writers, directors, and movie stars. But in the past couple of years, Sugar has shifted his focus to help brands divert some of their media dollars into entertainment. “Thirty-second commercials are struggling to find an audience because the audiences are paying to skip them,” said Sugar, who also cited data privacy concerns on social as another growing concern for marketers. “Brands need a more authentic relationship with the consumer. And their budgets are getting scratched.” Brands hire Sugar23, either on a project basis or on a retainer similar to an agency of record relationship, for entertainment purposes. Then Sugar23 creates a brief in tandem with a brand based on the type of entertainment they want to invest in and can also source ideas and early-stage material suitable for a specific brand's investment. Sugar said the company also helps brands understand different investment models used within the entertainment industry. The Way Upfronts and Sugar23’s offering benefits Hollywood as well, he said, since streaming has made the landscape more competitive and at times more expensive to produce original programming. “The customer acquisition costs of getting new subscribers [for distributors such as Netflix or NBC] is very high and it’s come in the form of spending billions of dollars on original content,” Sugar said. “Now they reverted to library assets. They’re making less right now because they need to spend less. [Brands investing in entertainment] is creating more opportunities in a shrinking world for talent.” Sugar added that his model is different than branded content. “With branded content, media dollars are required to get eyeballs,” Sugar said. “In our model, media dollars are spent on the actual content and the eyeballs are secured by the premium distributor, just like any traditional show, movie, or documentary.” Beyond the financial benefit of owning IP for a successful piece of content, Sugar believes that the influence is greater than typical advertising methods. The success of “Barbie” last year was a proof point, he said. “A lot of brands looked at ‘Barbie’ as an anomaly because it was based on IP and we believe that the IP that has great value is the brand itself, the logo, the name, the relationship it has with its consumer. Entertainment is a bridge … it’s a loyalty program in disguise.”

Hollywood to pitch brands on financing movies and TV shows in new upfront

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