Why Hillary's Former Operative Bought a Hollywood Box-Office Tracking Firm

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Mark Penn (left) and Howard Ballon

"I've always felt there was a synergy between Hollywood and politics," says political analyst and former Microsoft chief strategy officer Mark Penn, whose investment firm The Stagwell Group acquired Nielsen's National Research Group on Nov. 16.

This story first appeared in the Nov. 27 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.

The firm that studios rely on for box-office projections, marketing data and advice in choosing the most lucrative date to open a movie is about to expand beyond Hollywood and into politics.

Nielsen revealed Nov. 16 that it will sell National Research Group to a new investment firm called The Stagwell Group, formed in December by political analyst and former Microsoft chief strategy officer Mark Penn. Backed primarily by former Microsoft CEO and Los Angeles Clippers owner Steve Ballmer, the fund has closed on $250 million in investment capital to acquire companies specializing in research, data analytics and public relations.

Penn is a former CEO of PR firm Burson-Marsteller and co-founder of polling company Penn Schoen Berland, and his list of famous clients includes President Bill Clinton and former British Prime Minister Tony Blair. But he is best known as the creator of Hillary Clinton's "3 a.m." campaign ad, which asked voters in 2008 if they'd prefer if she or then-candidate Barack Obama answer the White House phone during a crisis.

Penn tells THR he intends to expand NRG into other arenas, specifically elections and public policy. "I've always felt there was a synergy between Hollywood and politics," he says. "The com­monality between a movie opening and a presidential election is, if you don't get it right, there's no do-over."

He sees synergies, in fact, with SKDKnickerbocker, a Democratic PR firm acquired by Stagwell in October for as much as $75 million that employs former RIAA head Hilary Rosen and Anita Dunn, former White House communications director for President Obama. NRG and SKDKnickerbocker, though, will remain independent companies housed at Stagwell, and NRG will be nonpartisan whenever it decides to delve into politics.

"The power of accurate research is more important in Hollywood and politics than in other industries," says Penn. "And today, the predictive ability is higher in movies than with presidential candidates."

That might be true, but movie tracking has been scrutinized recently as traditional services have failed to predict massive hits like Jurassic World. NRG has been tweaking its methods, annually conducting more than 1 million survey interviews online and via mobile phones to gauge consumer interest and awareness of upcoming releases. In addition to expanding into politics and other areas, Penn intends to make NRG more digital and global. He has tapped market research veteran and NRG consultant Howard Ballon as interim CEO. NRG had about a dozen layoffs during the five-month period it was being shopped, but Penn says he has no plans to cut further the 100-person staff in its L.A. and London offices.

Stagwell's acquisition of NRG marks the latest in a trend of consolidation among Hollywood's go-to market research firms, taking place less than two months after comScore said it would merge with Rentrak and a year after RLJ Equity Partners said it would buy MarketCast, a competitor to NRG.

"It's not a big marketplace, but it's an important one," says Penn. "After all the consolidation, NRG will be one of the few remaining big players."