When the attorney general starts looking at your business to determine whether your company misled investors, it might be slightly suspicious to dump the main offending subsidiary off on its lonesome. But that’s the plan for MoviePass parent company Helios and Matheson, as it’s announced that the almost comically beleaguered subscription service for theatergoing will be spun into its own business entity.
Helios and Matheson seems finally fed up with the service — or at least fed up with being blamed (and its stock price being blamed) for all its problems. “Since we acquired control of MoviePass in December 2017, HMNY largely has become synonymous with MoviePass in the public’s eye, leading us to believe that our shareholders and the market perception of HMNY might benefit from separating our movie-related assets from the rest of our company,” Helios and Matheson CEO Ted Farnsworth said.
Dumping the PR nightmare of MoviePass is an attractive plan, doubly so since the new company — MoviePass Entertainment Holdings — could focus completely on the film world. It’s planned to consist of MoviePass shares, MoviePass Films shares, MoviePass Ventures, and Moviefone. That gives it control over the subscription service, its production wing, and its acquisition wing, allowing it to mess with buying completed films and making ones of its own.
Some of that may simply help distract from the fact that MoviePass was burning money so fast that it actually ran out and suffered a service interruption, or that it has a possessive grip on subscriber’s membership statuses. Some may actually make some money, but discarding the business looks more like tossing evidence into the river than setting something up for success.
After ridding itself of the financial trash fire of MoviePass, HMNY will focus on “data analytics and consumer centric technologies,” a release stated. The creation of MoviePass Entertainment depends on a lot of hoops being jumped through, including “completion of audited financial statements of MoviePass Entertainment,” so the planned separation may not happen and HMNY may not be able to get away that easily. If the past has been any indication, this isn’t the last drama we’ll hear about MoviePass.