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Film finance update
from: variety.com
by ADAM DAWTREY, SHARON SWART, ANTHONY KAUFMAN, MATTHEW ROSS
Private equity -- mostly from high-net-worth individuals -- is still available. Sure, Bernie Madoff may have dented a few pockets, but highfliers love to head to Hollywood.
"The crazy money is gone," decries one agent with almost equal parts woe and relief.
It means fewer and, hopefully, better projects will get made, which should help ease the glut of films that flooded the indie marketplace over the past several years.
Some investors have reduced their commitments to film production, such as Sidney Kimmel and 2929's Todd Wagner and Mark Cuban, while others are stepping in.
What's new is that today's active private equity players are more conservative.
"It's taking 10 more conversations to get anything done," says UTA's Richard Klubeck.
Complicating the scene are the credit crunch and the precarious state of foreign presales. The world's film buyers are pickier than ever, and their offers are lower -- and banks aren't able to gap the shortfall. So the pressure is on equity investors to foot the majority of a pic's budget.
"Movies that are getting made have a substantial slug of equity in there," says sales agent Stuart Ford of IM Global, whose slate is packed with films that fit that description.
The list that follows includes companies, mainly with private equity backing, that are currently active in production finance. Our list isn't comprehensive, though it gives a snapshot of some of the players in business with the major packaging agents, sales agents and finance companies.
RIVER ROAD ENTERTAINMENT
HQ: Los Angeles and Minneapolis
Equity source: Company founder Bill Pohlad, son of the late Minnesota billionaire Carl Pohlad, owner of the Twins.
Activity: Finance and production, on average one or two films annually. Fully financed pics such as 2005's "Brokeback Mountain."
Pics: Docu "Food, Inc.," co-financed with Participant; Terrence Malick's "The Tree of Life," starring Brad Pitt and Sean Penn; Doug Liman's Valerie Plame pic "Fair Game," with Penn and Naomi Watts; JOAN JETT biopic "The RUNAWAYS"
ALCON ENTERTAINMENT
HQ: Los Angeles
Equity source: FedEx founder Fred Smith remains Alcon's sole pure equity source. In May 2008, the company also closed a $550 million finance deal, consisting of senior bank finance led by JPMorgan Chase, with CIT mezzanine financing.
Activity: Finance and production. Average budgets are $40 million, with a range that goes as low as $15 million and as high as $100 million. Run by co-founders and co-CEOs Broderick Johnson and Andrew Kosove, Alcon does not provide gap financing, but can acquire films from third parties to distribute through its output deal with Warner Bros.
Pics: Hughes Brothers-helmed postapocalyptic actioner "The Book of Eli," starring Denzel Washington; John Lee Hancock's sports drama "The Blind Side," with Sandra Bullock and Kathy Bates
BIG BEACH
HQ: New York
Equity source: An equity fund put together by several individual investors, from a wide range of backgrounds, including hedge funds and real estate.ÊFounding Big Beach partner and backerÊMarc Turtletaub is theÊformer president and CEO of the Money Store.
Activity: Invests in and produces film, television and theater, with varying degrees of fiscal participation, on budgets ranging from $500,000 to $25 million. Little gap or bridge financing.
Pics: Sam Mendes' dramedy "Away We Go," with John Krasinski and Maya Rudolph; Philip Seymour Hoffman's directorial debutÊ"Jack Goes Boating"; Michael Caine melodrama "Is Anybody There?"; OvertureÊsleeper "Sunshine Cleaning," with Amy Adams and Emily Blunt
BOLD FILMS
HQ: Hollywood
Equity source: Belgian industrialist Michel Litvak, whose key interests lie in oil transportation businesses. Bold's model aspires to 20%-25% equity positions combined with presales, soft money plus gap or a domestic distribution deal.
Activity: Finance, production and foreign sales. Co-prexy David Lancaster says it is Bold's "goal to make smart genre pictures in the $10 million to $30 million range." He adds, "We're not against finding other equity partners, but we are willing to take the load on the equity side if we need to." Bold recently fully financed 3-D pic "The Hole."
Pics: Joe Dante-helmed thriller "The Hole"; projects in development include Joseph Ruben's thriller "Jack," Phillip Noyce's "Above Suspicion," Jay Chandrasekhar-helmed comedy "Opposites Attract," and an untitled James Mangold thriller.
CinemaNX
HQ: Douglas, Isle of Man and London
Equity source: Isle of Man Film Fund, which received a $75 million injection from the Isle of Man government to create CinemaNX as a private company in 2007.
Activity: Production finance. NX invests 50%-100% of budgets as equity, typically against English-speaking distribution rights, and acts as an exec producer. Projects are usually required to shoot in part on the Isle of Man.
Pics: Philip Ridley-helmed horror pic "Heartless"; thriller "Wild Target," with Bill Nighy and Helena Bonham Carter; Spanish animated pic "Chico and Rita"; Richard Linklater's "Me and Orson Welles," starring Zac Efron; Brit comedy "A Bunch of Amateurs"; "The Disappearance of Alice Creed," starring Gemma Arterton
ENDGAME ENTERTAINMENT
HQ: Beverly Hills
Equity source: Initially funded by several private investors, including company topper Jim Stern, one of the owners of the Chicago Bulls.
Activity: Production and finance of films in varying budget ranges, from docus to features, including Todd Haynes' "I'm Not There." Stern also invests in theater production and directs, most recently "A Chorus Line" docu "Every Little Step."
Pics: Lone Scherfig's Sundance World Cinema audience winner "An Education"; Stephan Elliott's "Easy Virtue," starring Jessica Biel; "Every Little Step," co-helmed by Stern and Adam Del Deo; Rian Johnson's "The Brothers Bloom," with Mark Ruffalo, Adrien Brody and Rachel Weisz; an untitled R-rated comedy written and directed by Alex Gregory and Peter Huyck
EXCLUSIVE MEDIA GROUP
HQ: London and Beverly Hills
Equity source: Cyrte, the Dutch investment fund bankrolled by "Big Brother" creator John de Mol. EMG was created last year by the merger of Guy East and Nigel Sinclair's Spitfire Pictures with Simon Oakes' Hammer Films.
Activity: Production and sales. EMG uses its own equity to pay for the development and production of projects from Spitfire and Hammer, and also puts up sales guarantees for third-party movies handled by Exclusive Film Distribution under Peter Naish.
Pics: Peter Weir's period pic "The Way Back," with Colin Farrell
LAKESHORE
HQ: Beverly Hills
Equity source: Company co-chair Tom Rosenberg, whose roots are in real estate. Financing mix includes private equity and presales, and Lakeshore has a facility with JP Morgan Chase.
Activity: Finance, production, foreign sales. Recent pics have ranged from $12 million-$60 million, with the sweet spot hovering between $25 million-$40 million.
Pics: Musical remake "Fame"; sci-fi thriller "Citizen Game," starring Gerard Butler; comedy "The Ugly Truth," toplining Butler and Katherine Heigl; Jason Statham-starrer "Crank 2"; horror-fantasy franchise "Underworld 3"; Isabel Coixet's drama "Elegy," with Penelope Cruz and Ben Kingsley
PARTICIPANT MEDIA
HQ: Beverly Hills
Equity source: EBay alumn Jeff Skoll founded Participant in 2004. The company recently created a $250 million revolving fund with Abu Dhabi's Imagenation.
Activity: Finance and production of three to four docs a year and three to five scripted features a year, all of which involve topics that benefit from Participant's social action campaigns. Participant is an investor in Summit Entertainment, with which it also has a distribution pact.
Pics: Docus "Food Inc.," "Pressure Cooker" and "Casino Jack," helmed by Alex Gibney; Joe Wright's "The Soloist," with Robert Downey Jr. and Jamie Foxx; Steven Soderbergh's "The Informant," starring Matt Damon; thriller "The Crazies"; and comedy "Furry Vengeance," starring Brendan Fraser; Ben Stiller's "Help Me Spread Goodness"
NALA FILMS
HQ: Santa Monica, Calif.
Equity source: An investment fund created by Emilio Diez Barroso, whose family owns Mexico's media giant Televisa.
Activity: Finance and production. Founded in 2004 and run by Darlene Caamano Loquet, Nala works on projects with budgets ranging from $10 million to $50 million. "On films $40 million and up, we usually look to have a partner," says Caamano.
Pics: Supernatural thriller "Shelter," with Julianne Moore and Jonathan Rhys Meyers; Max Winkler's "The Ceremony"
OCCUPANT FILMS
HQ: Los Angeles
Equity source: Financed by private equity and a credit facility. Run by partners/producers Keith Calder, Felipe Marino and Joe Neurauter. Via Snoot Entertainment, Calder also finances and produces, with recent pics including actioner "Bunraku," starring Josh Hartnett and Demi Moore.
Activity: Produce and finance one to two movies a year with budgets up to $25 million.
Pics: Comedies "Peep World," with Rainn Wilson and Sarah Silverman; "The Key Man," with Brian Cox, Hugo Weaving and Jack Davenport; Sundance '08 fave "The Wackness," with Ben Kingsley
RED DRAGON
HQ: Beverly Hills
Equity source: Entrepreneur Franck Dubarry, who in 1990 founded Paris-based ad agency Gram and then launched luxury watch brand TechnoMarine. After selling TechnoMarine in 2007, Dubarry started film company Red Dragon.
Activity: Focused financing and producing genre films in the $10 million-$35 million range: particularly thriller, action, sci-fi and horror pics that travel. Red Dragon, run by former Endeavor agent Sandrine DeClercq, has an alliance with financing company Oceana, through which it invested in "13."
Pics: Gela Babluani's "13," with Jason Statham, Sam Riley and Mickey Rourke; developing Alex Litvak-penned action pic "Five Against a Bullet"; dark psychological thriller "Focal Point," scripted Craig Gerber; Israeli spy thriller "Land of Our Fathers," based on a true story and penned by Soo Hugh
RELATIVITY MEDIA
HQ: Beverly Hills
Equity source: Company topper Ryan Kavanaugh; NY-based hedge fund Elliott Associates
Activity: Kavanaugh, known for brokering studio slate financing, also finances and produces on a single-picture basis. He says Relativity works on about 10 films a year in the $25 million-$80 million range, focusing on pics with worldwide commercial appeal, including action, broad comedy and sci-fi. Relativity acquired Universal's Rogue label last year and has an output deal with Lionsgate. Foreign distribution partnerships are serviced by Mandate Intl.
Pics: Jackie Chan action comedy "The Spy Next Door"; Dominic Sena adventure "Season of the Witch," with Nic Cage; Jim Sheridan-helmed remake of Danish pic "Brothers," with Jake Gyllenhaal and Tobey Maguire; Lasse Hallstrom's "Dear John," with Channing Tatum; thriller "A Perfect Getaway," starring Milla Jovovich; Tarsem Singh's "War of Gods"
VENDOME
HQ: Los Angeles
Equity source: A group of private investors, plus a mezzanine facility via Newbridge Film Capital and a credit facility funded by a consortium of banks led by CIT and RBS Greenwich Capital.
Activity: Headed by French showbiz scion Philippe Rousselet, Vendome plans to produce at least 12 films with budgets ranging from $10 million to $40 million over the next five years. Summit Intl. will oversee the sale of Vendome's pics overseas, except in the U.K., where StudioCanal's Optimum Releasing will distribute.
Pics: To be announced.
WAYFARE ENTERTAINMENT VENTURES
HQ: New York
Equity source: A strategic investment fund
Activity: Fully finance two to three films per year, withÊbudgets ranging from $10 million to $30 million. Founded in 2008. Wayfare's managing partners are Ben Browning, Michael Maher and Peter Rawlinson, all producers with financing experience.
Pics: "Ondine," Ireland-shot feature directed by Neil Jordan, starring Colin Farrell, made with the help of investment from Irish Film Board and Irish taxÊincentive; two more projects to be announced soon
WINCHESTER CAPITAL
HQ: Los Angeles
Equity source: $200 million fund raised from mostly U.S.-based investors, mostly pension funds and hedge funds.
Activity: Overseen by Jean-Luc de Fanti (the other partner is venture capitalist and former studio exec Jeff Sagansky), Winchester finances indies in the $15 million-$20 million range, but it can make a wide variety of deals, including co-financing studio pics and doing a multipicture pact with overseas companies such as Luc Besson's Europa Corp. Company also does gap, bridge and debt financing as well as buying and selling tax credits in both the U.S. and abroad. De Fanti says Winchester won't do pure equity: "We won't finance the film unless we have at least some other piece of the package (covered)."
Pics: Iraq war comedy "Men Who Stare at Goats," starring George Clooney, Kevin Spacey, Jeff Bridges and Ewan McGregor and helmed by Grant Heslov; Jason Statham starrer "Transporter 3" (part of the EuropaCorp deal); writer-director Rebecca Miller's "The Private Lives of Pippa Lee," starring Robin Wright Penn
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