Now, without further ado…

Before The Chosen became a global faith-based entertainment franchise, it was a kind of digital collection plate. Thousands of Christian believers chipped in to fund a television series about Jesus, helping to transform a crowdfunding campaign into a commercial phenomenon with theatrical releases, Amazon Prime Video distribution, and an audience that its creators measure not merely in viewers—some 250 million—but in souls reached.

Now a shareholder lawsuit, quietly filed this past week against 5&2 Studios in the Delaware Court of Chancery, alleges that some of those early acolytes were prevented from sharing in the miracle. The complaint tells a sort of reverse loaves-and-fishes story, borrowing from the biblical tale in which Jesus miraculously multiplied five loaves and two fish into enough food for more than 5,000 people. In this version, just as The Chosen stood on the verge of its greatest commercial success, 5&2 cashed out its flock of Christian investors. Instead of feeding the multitude, the complaint alleges, “the insiders fed only themselves.”

Christopher Garabedian, the chief executive of life sciences accelerator Xontogeny, is leading the charge. His usual terrain is biotech, but in 2019, after watching a 20-minute YouTube short about the Nativity told through the eyes of a shepherd, he invested $300,000 in the then-nascent project. That made him, he has said, the largest single crowdfunding investor in The Chosen and a co-executive producer of its first season.

He was hardly alone. Director Dallas Jenkins had posted the video as a catalyst for a crowdfunding campaign that ultimately drew thousands of believers into the enterprise. Their money helped turn The Chosen from a faith-driven experiment into one of the most unlikely hits in modern entertainment. Later, as the company grew, a nonprofit called the Come and See Foundation, led by Hobby Lobby heir Mart Green, became central to the show’s financing—funneling donor support toward production costs and helping 5&2 fund the remaining seasons.

That relationship has become a point of pride for the company. “Our relationship with Come and See is critical to us because they finance us, but Come and See is spreading Christianity throughout the world,” 5&2’s president of production, Mark Sourian, told Christian Daily earlier this month. (Sourian joined 5&2 after a run at Universal Pictures, where he worked on films including The Fate of the Furious and Hobbs & Shaw.)

According to the lawsuit, however, those original stockholder-believers are no longer quite so critical. In March, 5&2 executed a reverse stock split that eliminated more than 16,000 Series B stockholders, cashing them out at $3.75 a share, and left insiders in full control of the company just as The Chosen was heading into its blockbuster final seasons, which were focused on Jesus’s last days, and with a slate of future biblical franchises to be distributed by Amazon.

Garabedian and his attorneys at Bleichmar Fonti also allege some very un-Christian timing. A stockholder vote blessing the reverse stock split came during Holy Week—one day after Palm Sunday and four days before Good Friday. More than three-quarters of Series B stockholders, they allege, didn’t participate. “This timing undercut the participation of minority stockholders, who were more likely to be focused on their families and worship than business dealings at the time,” the complaint read. In other words, the faithful who helped build The Chosen were asked to mind the cap table at the very moment they were preparing to contemplate the Stations of the Cross. (5&2, Jenkins, and Sourian didn’t respond to an opportunity to comment.)

There’s a faint echo here of the emotional Chancery drama from a few years back over AMC’s meme-stock era. The small-time investors who’d helped save the theater chain felt betrayed when the company issued a special class of preferred stock and pursued a one-for-10 reverse split. But the 5&2 case is not really the same animal. It’s closer in spirit to the continuing fallout from Endeavor’s go-private: a dispute over whether minority holders were squeezed out at the wrong price so that future upside could be spread among a, well, chosen few. But that’s what makes it useful. Beneath the biblical metaphors and Delaware pleadings, the case offers a rare financial look behind the curtain of faith-based entertainment at the precise moment it is becoming a real Hollywood business.

5&2 Studios was not exactly starving for cash. The Chosen began with crowdfunding—about $11 million to finance Season 1—but eventually grew into a business with meaningful theatrical receipts and roughly $240 million in total backing from the Come and See Foundation. Under a hybrid model that released chapters of Jesus’s journey in theaters before moving them into episodic streaming windows, Seasons 3, 4, and 5 grossed more than $20 million, $30 million, and $40 million, respectively, at the box office, according to the complaint.

So what was the company worth? Garabedian’s lawyers point to two very different answers. The first came during a phase known as “Project Cornerstone,” when 5&2 explored a sale of outstanding equity to a third party. At that point, the complaint alleges, insiders were effectively positioned as sellers and therefore had every incentive to maximize the company’s value. The projections were correspondingly bullish. The final two seasons of The Chosen, as well as follow-up movies and TV shows, were expected to generate about $1.4 billion in revenue from 2026 through 2029, implying an enterprise value of roughly $150 million.

But the numbers changed dramatically during the second phase, “Project Sequel,” when the company turned its attention toward buying out minority shareholders. Now, the complaint alleges, the insiders had the opposite incentive. With Goldman Sachs doing the valuation work, the 2026–2029 revenue projection fell to $722 million—a $681 million haircut. Goldman’s fairness analysis supported the $3.75-per-share cash-out price, implying a $52.9 million enterprise value.

Garabedian says that number is far too low. His lawyers point not only to the earlier Cornerstone figures but also to Angel Studios, which co-produced the first season of The Chosen and has become a heavyweight in faith-based entertainment. Angel, the company behind Sound of Freedom and the animated film David, went public last September through a SPAC reverse merger at a $1.6 billion valuation. Its stock has since fallen, leaving the company worth just under $600 million, but even that diminished figure towers over Goldman’s valuation of 5&2. The complaint calls Angel “unequivocally the most appropriate comparable,” adding that 5&2 had a stronger social media presence and a more loyal fan base. And yet, Garabedian has alleged, “Goldman did not even mention Angel in its fairness deck.”

Garabedian’s narrative of Jenkins & Co.’s pushing out the flock before the harvest is powerful, but this is not, formally, a morality play. It’s a Delaware Section 155 fair-value case, and 5&2 will presumably argue that the buyout was entirely legitimate. According to the complaint, the board began discussing “going dark”—that is, completing a transaction that would eliminate the company’s S.E.C. filing and reporting obligations—as early as 2023. Garabedian may be skeptical of the squeeze-out’s motivations, but the defense has obvious answers: S.E.C. reporting costs were real; Goldman issued a fairness opinion; minority holders received a vote; and Series B investors were never promised a permanent ride on The Chosen’s upside. Being mission-driven, after all, does not bar a company from rationalizing its capital structure.

Still, the optics are obviously brutal for a company built on the devotion of Christian believers. It will be interesting to see whether the litigation dents 5&2’s image or affects the reception of future releases.

Maybe it won’t. Perhaps this merely testifies, for better or worse, to the maturation of faith-based entertainment into a real business—one that has moved from church basements and direct-to-DVD distribution into the same machinery that governs the rest of Hollywood: streaming windows, theatrical grosses, complex financial models, conflicted fairness opinions, and, finally, a pilgrimage to Wilmington to “appear before the judgment seat.” Or at least meet the vice chancellor.

Thanks, Eriq. See everyone next week.

Matt

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