A New Movie Studio's $100 Million Launchby
Who says you can't raise money these days for Hollywood films? Well, just about everyone. Even Hollywood heavyweight Steven Spielberg is having his troubles, suffering through months of waiting while a group of banks puts together the $325 million he needs to launch his newly reorganized DreamWorks Studio. That loan is widely expected to be announced within two weeks.
But while most of the attention lately has focused on the financial challenges of Hollywood biggies, a couple of scarcely known media financial types named Mary Dickinson and Charlene Fisher have managed to raise $100 million to launch a company called DF Indie Studios. The new studio is set to be unveiled on June 15—and claims it has the investor backing to finance and distribute 10 to 12 lower-budget films starting in 2010.
Dickinson is a onetime TV producer and financial consultant who helped structure deals for TV and film companies. Fisher worked at GE Asset Management (GE), where she restructured entertainment and Internet companies.
Together they have created a film company that they say works under the simplest of financial arrangements. They won't borrow money—traditionally the lifeblood of Hollywood producers. Instead they have found a few large investors willing to front them $100 million in return for a piece of the revenues the new company will generate. Traditionally, studios keep large pieces of the revenues for themselves, most notably fees of up to 15% of a movie's revenues for distributing it to theaters and on video.
a better deal for investors
Dickinson and Fisher say they will also cut their investors in on revenue sources that include the money they receive by filming in states or countries that offer tax incentives, as well as the $150 million they have arranged in up-front fees from foreign distributors in return for licensing those distributors their films. That, too, is in sharp contrast with traditional Hollywood studios, which use those advances to fund overhead and the production costs of films. Dickinson and Fisher say they also have access to a revolving credit line and have signed distribution agreements in the U.S. but won't name the companies.
Should that raise eyebrows? Maybe. Hollywood companies have a long history of being short on details and making announcements before contracts have been signed. The new studio also says it has a list of producers with whom it has signed deals to make films, including heavyweights like Ridley Scott, director of Gladiator and Thelma and Louise, and his brother and fellow director, Tony. Producer Jennifer Fox (Michael Clayton and Syriana) has also signed on. The duo won't disclose the films they have on their slate. Dickinson and Fisher are waiting because some of their financial partners want to make their own announcements about the deal.
If the two financiers can pull this off, they will have helped to break a year-long logjam for filmmakers who have struggled to find money in a cash-restrained world. "We're not in Spielberg's league—not even in his universe," says Dickinson. "We're offering what investors want—risk." The duo say they have investors from throughout the world, including Asia, India, and Europe. And they have a list of supporters, including NBC Universal Co-Chair Ben Silverman and GE Asset Management Chief Investment Officer David Wiederecht, who have agreed to serve on their advisory board.
All they need is to do is to start making films.