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 an award winning lucrative feature library. Earlier today, Andreas reported that there’s buzz of Neon launching a UK distribution arm ala Lionsgate. Department M is already supplying development and production ready projects as part of the new deal.

Tom Quinn will remain the CEO and Founder of Neon. Department M Partner Schaefer will become Neon’s Chief Content Officer.  Department M Partner Mike 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.

We told you during the European Film Market back in February that Neon was in talks with Department M for a capital injection. Neon had been searching for an additional investor for sometime; there were rumors a few years ago that Steven Rales’ Indian Paintbrush were kicking the tires.

The new deal will keep longstanding 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.

Both Neon and Department M before the deal have partnerships with Qatar. The Qatar Film Committee has a slate deal in place with Neon, and a biopic production with Department M.

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. Department M has Cary Joji Fukunaga’s upcoming 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 straight Palme d’Or. In addition the pic won the FIPRESCI award on the Croisette. Also, Best Actress went to Virginie Efira and Tao Okamoto’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 saw a Best Picture nomination for its Cannes 2025 titles Sentimental Value and The Secret Agent (with the former ultimately winning Best International Feature Film).