When that $450 million film-financing deal Deutsche Bank was working on for Paramount collapsed last summer, it was pretty clear that the credit crunch had put an end to the once-thriving business of film-financing deals.
Now with two high-profile deals enmeshed in lawsuits and Goldman Sachs having pulled out of its Lionsgate agreement, banks who still have film-financing agreements on their books are trying to sell them to specialty investors at 30-70 per cent discounts.
Reuters: “Because of the credit crisis, banks and hedge funds have been writing down securities, including those backed by film assets, and are willing to sell them at lower prices,” said Stephen Prough, founder of Salem Partners, which advises investors on how to maximise film investments.
Prough and others cited strong interest and deep pockets for movie assets at current, reasonable prices from seasoned entertainment investors who specialize in the industry, know it well and take a longer-term view on returns.
Among those who’ve been buying movie assets are Content Partners, backed by Mark Cuban and Todd Wagner.
“Not only are we buying from financial sellers but we’re also looking at transactions for the first time with studios and networks for participations in TV shows and film profits,” said Content Partners President Steven Kram.
“We’ve already purchased 34 films and over 200 hours of television. We can provide a new source of financing for studios and networks who are being squeezed for every penny.”
David Molner, managing director of Beverly Hills, California-based Screen Capital International is also taking on studio slate deals.
“I’m five times as busy as I used to be. We launched a $500 million fund that is financing the acquisition of assets in studio slate deals,” said Molner. “We are taking the participants in finance deals out of their capital positions in studio slate deals.”
Photo From Pacific Rim Magazine
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