New York-based October Films has concluded a private placement engineered by Allen & Co. Inc., which gives the fledgling indie marketing and distribution company a significant boost in its bid to challenge such competitors as Fine Line Features, Samuel Goldwyn Co., Sony Pictures Classics, Gramercy Pictures and Miramax,sources confirmed yesterday.
Lead investors in the private placement are Allen & Co. and Siegler, Collery & Co. The conclusion of the placement is believed to be the linchpin of a combined $ 15 million equity and debt package designed to capitalize October through the initial phase of its five-year business plan.
Company partner Amir Malin described Allen & Co. and Siegler, Collery & Co. as “key investors, who will help us grow our company.” October partners Malin and John Schmidt declined comment on the structure or size of the private placement.
In conjunction with the announcement, October announced the launch of its Mad Dog Pictures banner, which will be used to distribute up to four exploitation titles annually. Schmidt said Mad Dog Pictures is a reaction to filmmaker inquiries for an adjunct operation that can market and distribute science fiction, action, horror and mystery titles. The first Mad Dog Pictures release is expected in the first quarter of 1993, Schmidt said.
As part of the company expansion, October also plans to enter the business of managing and distributing film libraries. October has targeted management of 200 to 250 titles by the time fiber-optic, pay-per-view systems begin to come on line en masse in the 1990s. The company is expected to announced a pair of movie libraries acquisitions over the next several weeks.
Allen’s investment is significant because of the the New York-based investment banker’s clout in Hollywood. Allen & Co. sports relationships with such power clients as Sony Pictures Entertainment, News Corp. and Victor Kaufman and Lewis Korman’s Savoy Pictures. By backing October, Allen & Co. appears to have championed the marketing and distribution company as a significant start-up in the indie arena.
“With the investor group in place, there’s no question that October should have the financial wherewithal to become one of the premier distributors of independent films in the country,” said Gary Siegler, principal of the Manhattan-based investment firmSiegler, Collery & Co.
The October investment is the first foray into entertainment for Siegler, Collery & Co. The company runs a $ 100 million marketable securities hedge fund, owns a controlling interest in publicly traded Medical Resources and owns six private companies, including National RV and apparel manufacturer Kick-kin Inc.
October’s expansion comes on the heels of a contraction in the independent film arena, where fewer companies compete for product, which has created a general downward pressure on independent film titles of roughly 20% to 25% over the last year. October plans to expand the number of movies it distributes from five titles annually to 8 to 10 titles by 1997, Malin said. Mad Dog Pictures will pitch in with another four, pushing the company’s total to 12 to 14 a year.
Siegler said investors were buoyed by the qualifications of the October partners: Former Goldwyn distribution prexy and Skouras Pictures exec Jeff Lipsky; former Avenue Entertainment exec VP Bingham Ray; former Miramax CFO Schmidt; and former Cinecom co-chief exec Malin.
October’s next release is the Gerard Depardieu-starrer “Tous Les Matins du Monde” (All the Mornings of the World), which opens Nov. 13 in New York.