Los Angeles, California — Department M, a rising production company launched by Mike Larocca and Michael Schaefer in 2024, is reportedly negotiating to acquire a significant equity stake in Neon, the acclaimed studio known for award-winning films such as “Parasite” and “Anora.”
The effort is being supported by a group of private investors, according to sources familiar with the discussions. Department M has been financed through private investments since its inception, aiding in its strategic moves within the competitive film landscape.
Neon had previously considered a sale in 2022, but talks with investor Steven Rales, affiliated with Indian Paintbrush, did not lead to a definitive agreement. The studio has since continued to build its reputation, producing a lineup of critically acclaimed films, including Jafar Panahi’s “It Was Just An Accident,” which won the Palme d’Or, and a series of notable works by various international directors.
Among its recent successes is “Longlegs,” a horror film that emerged as a box office sensation, raking in nearly $130 million following its release in 2025. This financial success has contributed to Neon’s strong reputation in the independent film sector, further established by winning the Academy Award for Best Picture for both “Parasite” and “Anora.”
Neon was founded in 2017 by Tom Quinn, who previously held executive roles at Radius and Magnolia, and it has since developed a robust slate of influential projects. The studio has consistently attracted top talent and critical acclaim, solidifying its place in modern cinema.
Meanwhile, Department M is gaining traction in the industry with a diverse film slate that includes an adaptation of Jo Nesbø’s “Blood on Snow,” featuring actors Aaron Taylor-Johnson and Benedict Cumberbatch, directed by Emmy-winning Cary Joji Fukunaga. The company is also producing a remake of “The Hand That Rocks the Cradle,” helmed by writer-director Michelle Garza Cervera, indicating a strategic focus on both established narratives and fresh storytelling approaches.
Schaefer, who previously served as the president of New Regency, and Larocca, a co-founder of AGBO with filmmakers Joe and Anthony Russo, are positioning Department M to expand its influence and portfolio within the industry.
As these negotiations unfold, Department M chose not to comment on the matter, while Neon has yet to respond to requests for further information. The potential acquisition highlights a growing trend of consolidation in the competitive landscape of film production, as companies seek to enhance their capabilities and reach through strategic partnerships.