Nikon to acquire RED and make it a subsidiary

[EOS 4 Life]

ilmmakers seldom actually buy equipment, but rather rent it for the duration of a production with Panavision being the the big dog in the rental business for that market

ARRI is the big dog.
RED is probably more popular than Panavision.
It is also rumored that RED makes Panavision cameras.
Sony originally made them before Sony backstabbed Panavision and went off on their own.
Sony seems to be front-stabbing Nikon while Nikon keeps buying Sony sensors.
Hopefully, this purchase puts an end to that.

 

[EOS 4 Life]

I see the risk factor in the Nikon acquisition as quite high.

That would depend on whatever the terms of the settlement between RED and Nikon.
Nikon may have been better off just buying them as long as they end up losing less money than they would have been paying RED.

 

[EOS 4 Life]

From the tone of things on social media, Jim and Jarred are walking away completely and RED could/would continue to operate on autopilot

Jarred has a strong presence in the RED community.
They do not seem to be on autopilot yet.

 

[EOS 4 Life]

It's neither. It's pronounced N-ick-on.

Nikon is pronounced one way in Japan and different ways in different countries.
Nikon USA can't be pronouncing its own name wrong.

 

[EOS 4 Life]

I'm wondering where Nikon got the money for this. I thought they were kind of on dire straights.

Their camera business was losing money but I do not think they were losing money overall.
Financials were less transparent back then since they were more tied into Mitsubishi.

 

[EOS 4 Life]

Canon has had Raw lite for some time now so I assume that it is their own IP

That is not a safe assumption.
The only way we would know for sure is if Canon was granted a patent.

 

[EOS 4 Life]

Nikon won their case against RED

Nikon did not win.
There was a joint request for a dismissal.
That more than likely was the result of a settlement between the two parties.
The same thing happened between RED and Sony and yet Sony only has internal compressed RAW video in their most expensive cameras and it is a paid license.

 

[Dragon]

That would depend on whatever the terms of the settlement between RED and Nikon.
Nikon may have been better off just buying them as long as they end up losing less money than they would have been paying RED.

That is possible, but I was speaking to the likelihood of success for the ongoing RED product line.

 

[Dragon]

ARRI is the big dog.
RED is probably more popular than Panavision.
It is also rumored that RED makes Panavision cameras.
Sony originally made them before Sony backstabbed Panavision and went off on their own.
Sony seems to be front-stabbing Nikon while Nikon keeps buying Sony sensors.
Hopefully, this purchase puts an end to that.

And Panavision rents them all, ARRI, Panavision, Sony, and RED. Do we even have an idea who makes RED sensors? RED is certainly not in the semi fab business, but they may contribute to the design.

As to Sony, it has gradually become a very different company than it was during the Morita years. Akio Morita was a man of his word and a pleasure to do business with. The current Sony is just another Big Tech company with the typical "get all you can" attitude.

 

[davidhfe]

Nikon may have been better off just buying them as long as they end up losing less money than they would have been paying RED.

If RED is in such dire straits that their only value is tied up in a IP, I'd imagine their investors would be far better off selling the patent portfolio on the open market.

 

[Bonich]

I'm wondering if Nikon is allowed to make RF lenses now.

Why not those Tele Zs as 3rd party mounted on RF?

 

[Bonich]

The shareholders get rich.

... while Nikon gets poor

 

[ericbowles]

Their camera business was losing money but I do not think they were losing money overall.
Financials were less transparent back then since they were more tied into Mitsubishi.

The camera business actually showed a loss in a single year - 2020 due to Covid - and even then was cash flow positive. Every other year has been profitable and with increasing net profit margins. Over the past three years, profits and sales are increasing every quarter and the stock price has doubled. The imaging business is dropping the entry level segment, so you see declining market share and a lot more profit. While Mitsubishi has some ownership of Nikon, their financial connection is essentially one where they collect dividends. Nikon's stock is publicly traded.

 

[DBounce]

I had thought RED and Canon had some arrangement where RED gets to use Canon’s mount and protocols while Canon gets to use their in-camera raw compression. I wonder what this will mean for Canon’s arrangement with RED. This seems like a pretty big shake up.

Depends on when that contract expires… but if soon, you might see internal compressed raw dropped from future Canon models.

 

[shadowsports]

RED's cameras are priced 5,999 ~ 44,999. Canon doesn't need to worry about REDRaw going into Nikon Cameras. This does however put Nikon into the Cinema Camera space. They purchased a stallion, but they will need to break and tame it now.

Canon isn't going to sit by while this is happening. I'm sure we are going to see Canon release some new RF mount cinema camera's. The C-70 is the only RF mount Cinema series available. Clearly the 24-105 Z is not just intended for still photography, and we are also waiting on 3 more power zooms if the rumors are true. Should be interesting.

 

[Mistral75]

The way that the acquisition was announced is an "equity transfer" and as an acquisition. Not paying in cash and yet not a merger. I'm sure that someone better versed in M&A could elaborate further on this method.

The way the press release is worded, the deal is structured as a share deal, not an asset deal. That's all you can infer from it. Nikon will buy all the shares and other membership interests (warrants, stock options, etc.) in RED from the two Js, not RED's assets from the company.

The deal has been signed (the so-called "Membership Interest Purchase Agreement") but not closed yet: "certain closing conditions" (conditions precedent) have to be satisfied before the deal is closed. On closing, Nikon will get 100% of the membership interests in RED and the two Js will get their money.

 

[LookingThroughMyLens81]

Nikon Buys Red! Here's a good talk about what's happened/happening, with the participation of Jarred Land himself.

 

[-pekr-]

This should not have happened and big miss on an oportunity for Canon imo. That gets Nikon to the league of ARRI and Sony, where imo Canon video cameras don't reach. If you think they do, show me a list of movies shot on Canon. Well, as far as a good fit, I think that RED would be a welcomed addition to the Blackmagic stuff.

Well, anyway - now Canon needs to buy Nikon, to get RED. That would settle many fanboys issues

 

[P-visie]

Well, anyway - now Canon needs to buy Nikon, to get RED. That would settle many fanboys issues

Canon buying Nikon would give Canon a 60+ percent marketshare in stills camera’s, I suspect the legislators will think that this has a negative impact on competition and disallow such a deal.

 

[EOS 4 Life]

If RED is in such dire straits that their only value is tied up in a IP

RED was a private company.
We can't really know what their value was.
Now their value is whatever Nikon paid for it which should show up as write-downs in Nikon financial statements.