Fox takes 50% stake and committs $25 mil to shingle

LONDON — Fox Searchlight has sealed a five-year U.K. production partnership with DNA Films to create a major British film company with access to worldwide distribution via Fox.

Searchlight has taken a 50% stake in DNA, and committed $25 million in production finance to match the $25 million DNA has left from the British lottery fund. It is one of the country’s three lottery franchises.

Following Searchlight’s own model, DNA will produce local movies budgeted up to $15 million.

DNA is run by Andrew Macdonald, producer of “28 Days Later,” “The Beach” and “Trainspotting,” and former Miramax exec Allon Reich.

They will greenlight projects jointly with Searchlight’s British-born president, Peter Rice.

Kenworthy steps back

DNA co-founder Duncan Kenworthy, whose credits as a producer include “Four Weddings and a Funeral,” “Notting Hill” and the upcoming “Love Actually,” has stepped down from the company’s management to focus on producing, although he remains a shareholder and non-exec director.

The deal builds on Searchlight’s long track record of success with U.K. pics, from “The Full Monty” and “Waking Ned Devine” to this year’s “Bend It Like Beckham” and “28 Days Later,” which was produced by DNA.

It’s a unique joint venture for Searchlight, a unit so tight with its overheads it has only one first-look deal anywhere in the world (with “Full Monty” producer Uberto Pasolini.)

Formal commitment

“The British film industry consistently provides the world with exciting films and dynamic filmmaking talent on both sides of the camera,” Rice said. “This new partnership formalizes our commitment to British films and is a natural outgrowth of our relationship with Andrew and the fantastic team at DNA.”

Said Kenworthy: “Global distribution and guaranteed financing for a slate of films are the twin keys to the growth of the British film industry. By forging this important long-term partnership with Fox Searchlight, Andrew has succeeded in finally turning DNA Films into an important tentpole for the independent British film sector.”

Nonetheless, the U.K. Film Council, which hands out lottery coin, is sure to come under fire in some quarters for giving so much subsidy to help a wealthy Hollywood studio establish a U.K. production base.

That criticism will be particularly fierce because Fox is owned by Rupert Murdoch, whose satcaster BSkyB is regularly accused, by both U.K. filmmakers and the Film Council, of failing to give adequate support to the local film industry.

There are also many in British film circles who consider the whole lottery franchise experiment, which began in 1997, as a failure that should be terminated, not dragged out for another five years.

DNA’s lottery franchise was due to expire in March 2004. It was awarded $44 million, but has so far managed to spend less than half of that, producing just six movies rather than the 16 promised.

That shortfall, however, is largely because Macdonald has suspended the company’s production over the past two years while he concentrated on finding a long-term global distribution partner.

Not a handout

Film Council chief exec John Woodward rejected the charge that he is giving a handout to a Hollywood studio. “We’re using lottery money to build a proper British film company, harnessing executive and creative talent to worldwide distribution,” he said.

Rice added, “There’s no capital going from DNA into Fox. I actually think we’re giving money to them.”

After Fox takes its distribution fees, all revenues from the movies will be retained by DNA to be reinvested in production.

As well as developing and fully financing its own movies, DNA will act as Searchlight’s principal U.K. vehicle for pre-buying North American and other rights to projects from outside producers.

The company will not, however, buy completed movies. According to Rice, local producers who do not wish to go through DNA will be free to deal directly with Searchlight in Los Angeles if they prefer.

This flexible approach was welcomed by Jeremy Thomas, the veteran British producer who has his own longstanding relationship with Searchlight, spanning such movies such as “Sexy Beast” and Bernardo Bertolucci’s “The Dreamers.”

“I think the Fox/DNA deal is absolutely great,” he told Daily Variety. “I will continue my direct relationship with Fox, but I will also be happy to consider going through DNA.”

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