The upstart production shingle Department M has closed a deal to acquire a significant stake in Neon.

Under the deal, first reported as being in talks in February, Neon founder Tom Quinn will remain CEO of the company, while Department M Partner Michael Schaefer will become Neon’s chief content officer.  Department M Partner Mike Larocca will stay at Department M and become a member of the Neon board.

Neon’s Jeff Deutchman remains president of acquisition, production and development for film. Department M’s Carina Sposato is now at Neon as EVP, television. Both execs report directly to Schaefer. Neon backers The Friedkin Group are still significant shareholders and board members of the company.

Financial details were not revealed, but it is said to be meaningful growth capital for Neon to expand, including the launch of its Neon TV division.

Formed in 2017 by Quinn, Neon is a key force in the specialty film market, backing best picture winners Parasite and Anora, and recently acquiring the much talked about Luca Guadagnino film Artificial after it was dumped by Amazon MGM Studios.

As for Department M, Schaefer and Larocca launched the company in early 2024 with backing from private investors including Forta Advisors after spending years producing. Larocca co-founded the Russo Bros. banner AGBO and worked on Extraction, The Gray Man and Cherry. Schaefer spent nearly seven years at New Regency before co-founding Department M, and before that earned an Oscar nomination for producing The Martian while working at Ridley Scott’s Scott Free.

Their projects include The Hand That Rocks the Cradle and Steven Soderbergh’s The Christophers, which Neon picked up out of the 2025 Toronto International Film Festival.