FEATURE
Michael Benaroya
Teddy Schwarzman
contender Margin Call. Benaroya Pictures is also behind upcoming thriller The Words star- ring Bradley Cooper. “There are opportunities out there but you’ve
got to be careful about what you commit to and remain disciplined about how you do it,” Benar- oya says. “I want to stay in this business, so we really scrutinise our creative and financial deci- sions.” Adi Shankar and Spencer Silna, the owners
and partners at 1984 Private Defense Contractors who launched the company with Doug Saylor, hail from wealthy clans. The young principals — aged 26 and 27 respectively — partnered with Mickey Liddell to back The Grey starring Liam Neeson and cash-flowed international sales (through Inferno) alongside Ellison on Cogan’s Trade, the crime thriller directed by Andrew Dominik, starring Brad Pitt. 1984 does not pro- vide senior debt, but it does guarantees and will commit to fully financing and also develop proj- ects and acquire international sales rights. The press-shy Liddell, backed by hedge fund
manager Charles Davidson, is another player who has come to Hollywood’s attention this year. Liddell has been snapping up distribution rights to a number of high-profile titles such as Toronto curio Killer Joe and partnering with Open Road on Sundance entry Silent House. Liddell also took US rights to Joe Carnahan’s The Grey before he licensed the rights to Open Road. Emmett/Furla is fully financing the $50m
crime noir Broken City set to star Mark Wahl- berg and Russell Crowe, while Brian Oliver’s Cross Creek Pictures, the company backed by Louisiana and Texas oil and gas magnates that struck gold with its first project Black Swan, has teamed with Guy East and Nigel Sinclair’s Exclusive Media Group. They have partnered on the Venice opening title The Ides Of March and the upcoming Formula 1 drama Rush, based on a Peter Morgan script which Ron Howard is directing. Meanwhile, Endgame Entertainment
founder Jim Stern wants to back more wide- release fare, and fully financed Looper, Rian Johnson’s eagerly awaited sci-fi title.
New-found confidence The calibre of the names involved in these proj- ects is inspiring confidence throughout the independent sector. “There’s a lot of opportunity right now,” says
Myles Nestel, the former UK investment banker living in Los Angeles who co-founded Cobalt Media before launching Oceana and Merlina Entertainment. Nestel is in the process of raising money for a new fund. “Prior to 2008 we had all the huge funds and when the crash happened, everyone backed out to focus on their core strengths. There’s been a lack of financing, so now is a great opportunity for Wall Street and the high-net-worth guys to move into the space. “Having new US distributors like Open Road and FilmDistrict enables more product to get
n 28 Screen International at the AFM November 2, 2011
Keith Calder
Steven Rales
made; you can get US distribution without a stu- dio deal as your partner. That’s surely going to be a benefit to the indie market and attractive to your capital partners.” Nestel, who financed Machine Gun Preacher
with 1984 Private Defense Contractors, notes the growing co-operation between the sales companies and capital sources, such as IM Global and India’s Reliance, and Sierra/Affinity and Incentive Filmed Entertainment. It is a point not lost on Cross Creek’s Oliver.
“The foreign market has returned when it comes to large studio-level fare with domestic in place — those movies are selling well,” he says. “The little movies without domestic are even harder than they were but there’s an appe- tite out there for movies like Rush with huge domestic in place [Universal]. Having the for- eign buyers know you have a major ad cam- paign and domestic release makes them feel comfortable, knowing they’re getting a big stu- dio movie. The financial market has a void and we’re filling it.” Cross Creek tends to fully finance or put up
equity. “I don’t really use mezzanine,” Oliver says. “I think it’s expensive money, so we would put up more equity and cover the mezz piece. We’re not looking to invest in other people’s projects and we’re not a bank, so we want to be involved from inception through development, production and release.” By contrast, Endgame’s Stern is prepared to take various positions in financing and has just
Megan Ellison
Ken Kao
Adi Shankar
‘The new generation of financiers is often personally in sync with the film-makers and
creative trends’ Micah Green, CAA
given himself another option through his new p&a fund. “Let’s say you have a $40m film,” Stern says.
“That doesn’t mean you have a risk for $40m; it’s far less, but you want to find your comfort level of exposure and work it around that. So maybe you will sell foreign and get some soft money. That’s how we look at things. We might do a film with a partner; there are all sorts of ways you can invest in a film.” Randall Emmett and George Furla have no
desire to sit at the distribution table and say they will not be launching a p&a fund in the foresee- able future. However, Emmett/Furla Films’ $250m fund with Stepan Martirosyan and Rem- ington Chase’s Envision enables the veteran pro- ducers to make nine to 10 films a year, budgeted at up to $70m apiece and build ownership in a library. They have a flexible approach and elected to
fully finance Broken City, which Inferno is sell- ing internationally, and put up equity in the case of the Jake Gyllenhaal crime drama End Of Watch which Exclusive is selling outside North America. “The financial crisis is still around in a big
1984 Private Defense Contractors cash-flowed sales on Cogan’s Trade, starring Brad Pitt
way, but if you’re aggressive and lucky enough to raise money it’s possible,” says Emmett, who is based in New Orleans where he can more readily take advantage of the Louisiana tax incentives. The charge of young investors includes Black
Bear, run by Teddy Schwarzman, the son of Blackstone chairman and CEO Stephen Schwarzman, which is backing A.C.O.D. (Adult Children Of Divorce) with Adam Scott and King Of Heists to star Jeremy Renner. Keith Calder’s Snoot financed Adam Wingard’s Toronto hit You’re Next, among others, and is backing the director’s next project. Waypoint Entertainment is led by Ken Kao, whose father, Min Kao, founded the satellite navigation company Gar- min. Kao fully financed Rampart, the police cor- ruption drama that premiered in Toronto, starring Woody Harrelson. Millennium Enter- tainment has picked up US rights. “This new class of financiers can be much
more savvy than their predecessors,” says Micah Green of CAA’s film finance division. “We can attribute this to at least two factors — for one thing, they’re trying to establish long- term careers for themselves, which requires that they demonstrate a track record of finan- cial success to the industry and/or to their partners, in contrast to some previous genera- tions of financiers, many of whom saw Holly- wood as an extra-curricular activity. “Also, the new generation of financiers is often
personally in sync with the film-makers and cre- ative trends that are most relevant among the mainstream film-going public. This is enabling them to identify compelling project investment opportunities at a very early stage without rely- ing on external tastemakers or competing finan- ciers to validate their instincts.” n
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