MGM, a studio that for the past few years has been mostly distributing movies made by other companies, has lately been trying to get back into making its own films, making a number of hires to this end, including appointing longtime producer Mary Parent to run production at the studio. Ever since then, we, and others, have wondered where the money was coming from to make these new movies. Today, the Financial Times provides an answer.
“MGM and Relativity Media – which is backed by Elliot Associates, a New York-based hedge fund – are discussing a deal that would see Relativity co-finance the production of several new MGM releases, according to people familiar with the situation.
These films would include the as yet untitled James Bond film and the big-screen adaptation of The Hobbit . MGM owns the largest film library in Hollywood and is also keen to revive franchises such as Fame , Robocop and Death Wish …
[Relativity] has a two-picture deal with MGM, although the proposal being discussed would extend this arrangement to include the company’s “tent pole” releases, such as Bond. The co-financing talks with Relativity come several months after the credit crunch forced MGM to suspend a proposed $1bn film franchise fund.”
We suspected something might be up with Relativity, since the firm was the only likely source of money behind the horror movie MGM just finished shooting called A Perfect Getaway. Also, Kavanaugh and Mary Parent already know each other, and apart from Asian funds like those in Abu Dhabi, Relativity’s really the only remaining source of outside money for Hollywood.
Relativity, as the FT notes, started out partnering with Deutsche Bank and Citigroup on a series of moderately successful slate-financing deals with Sony Pictures and Universal. But, in recent months, the credit crunch has seemed to put a halt to these Wall-Street financing deals. As the FT notes, it already reportedly scuttled a deal between Goldman Sachs, Deutsche Bank and MGM last summer. And it may be the reason Paramount has yet to finalise the film-financing deal they’ve been working on for the past six months. In fact, since last summer, the only big new slate film-financing deal announced was Relativity’s deal to finance a series of movies for Universal last March in which the production company didn’t partner with a single investment bank.
Meanwhile, Nikki Finke reports that the New York Times has an extensive interview with MGM head Harry Sloan in Sunday’s paper. We can’t wait to read what he has to say.
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