Indie film finance is taking yet another hit as a key funding source appears to be drying up.
Canuck pension fund CDP is apparently halting further investment in Hollywood, a move that could leave Mosaic and Dick Clark Prods. scouring for future coin elsewhere. CDP is reducing its private equity investments and reconsidering its Hollywood strategy out of concern that the assets have not been productive.
Par-based Mutual is also re-aligning its foreign partners — Toho-Towa in Japan, Tele Munchen in Germany and BBC Films in the U.K. — and seeking to make new distribution arrangements in other territories.
Mutual topper Gary Levinsohn told Daily Variety Tuesday that the company will continue to co-finance pictures with Paramount under its new structure.
Los Angeles-based CDP Capital Entertainment, headed by Henry Winterstern, oversees the pension fund’s Hollywood investments. Winternstern will meet with CDP in the next week to discuss what the pension fund’s next moves will be.
Among the possibilities is using CDP as a vehicle to bring other investors to the table.
Winterstern opened CDP’s Los Angeles office in December 2001, having already invested in management firm and production company Mosaic and in Stewart Till’s Signpost, in addition to taking a 2% stake in MGM.
Over the next year, CDP bought Dick Clark Prods. for $140 million. In fall 2002, Signpost folded and CDP rolled its investment into Lakeshore, taking a minority stake in the sales and production company. Lakeshore also took over international sales of Signpost’s “Bulletproof Monk.” That film proved a flop, earning just $28 million worldwide.
As for Mutual, Levinsohn and Mark Gordon launched the company in 1995. In 2000, Gordon exited the partnership and was replaced a year later by former Par exec Don Granger.
Mutual’s international partners often complained that while they provided the stateside shingle with equity investment, they didn’t always get rights to the company’s best projects.
(Gordon and Levinsohn were exec producers on “The Patriot” and “Saving Private Ryan,” for example, but Mutual’s investors were left out of that loop.)
However, they scored big with the “Tomb Raider” franchise, which Mutual co-financed. It was released through Mutual’s foreign partners in conjunction with UIP in 2001. The first installment earned $275 million worldwide.
The foreign backers installed safety valves on their deals when Mutual reupped at Par in 2001. While they happily accepted “Tomb Raider,” the distribs could now accept — or reject — Mutual projects on a case-by-case basis.