Joel Silver’s Dark Castle Prods. has raised $240 million from half a dozen investment firms to make 15 films over the next six years, with Warner Bros. aboard to distribute the entire slate.
Unlike hedge-fund pacts, in which a studio decides which films to make and which funds to partner with, Silver’s deal gives him sole approval to greenlight pics and full creative control. He will own the pics outright after his investors — who are putting up 100% of the financing in both equity and debt — get paid back.
Dark Castle, a label within the Warner-based Silver Pictures, will build its own library.
Under the deal, underwritten by CIT Group, which then brought aboard additional investors, films will be budgeted at $15 million-$40 million.
Most of the private equity money flowing into Hollywood involves Wall Streeters backing a studio slate. Deals with producers may involve a studio partner but seldom carry guaranteed distribution.
“We’ll be like a mini-studio inside the studio,” Silver told Daily Variety over the weekend.
Under the new deal, Dark Castle will expand beyond its horror repertoire into thrillers, action and comedy to become a full genre label. With the expansion, Steve Richards and Susan Downey are being elevated to co-presidents of Dark Castle. Richards will handle the financial and business side; Downey will oversee the creative and production side.
Cash from Dark Castle’s new revolving facility will be used to fund the first eight pics. Under the plan, returns from those films will be plowed into the rest of the slate.
Along with underwriter CIT Group, investors are JP Morgan, D.E. Shaw, Comerica Bank, GE Capital, IDB Bank and Bank Leumi. What persuaded them was having secure distribution plus a number of films — about a dozen — in various stages of development at Warner that could be earmarked for the new venture.
“You won’t see that very often. You may never see that again,” Wade Layton, managing director of CIT Communications, Media and Entertainment, told Daily Variety.
Warner Bros. Pictures will take a distribution fee and finance all print and advertising costs in exchange for worldwide distrib rights — with the exception of two international territories, where Dark Castle will be permitted to sell its films directly. One of those territories will be France, where Dark Castle has partnered with StudioCanal. The other territory will be decided on a pic-by-pic basis.
Warners prexy of production Jeff Robinov said Silver has more than earned the studio’s trust and confidence.
“Entering into this new phase in our business arrangement gives Joel the kind of well-earned creative freedom enjoyed by very few producers in the film industry, and it lets him do what he does best — make great movies,” Robinov said.
Output deals can prove a lucrative revenue source for studios. MGM is counting on a variety of output deals to get up and running. Warners could find output deals especially pleasing since it means keeping the studio’s vast pipeline filled.
First Dark Castle film under the deal is expected to be action thriller “Whiteout,” based on Greg Rucka’s book about a lone U.S. marshal in Antarctica tracking the continent’s first serial killer. Pic is expected to start production this winter for release in the first quarter of 2008.
Next two are psychological horror pic “The Summoner,” written by Matthew Sand and to be directed by Victor Salva; and urban action movie “Gangland,” written by Alex Tse.
Silver has a 20-year relationship with Warner Bros. Silver Pictures, whose deal with the studio will continue through 2009, has produced 33 films for the studio — including the “Lethal Weapon” franchise and the “Matrix” trilogy — generating nearly $8 billion in worldwide revenues.
Silver launched Dark Castle in 1999 with Robert Zemeckis, churning out “House on Haunted Hill,” “Ghost Ship,” “Gothika,” “House of Wax” and upcoming supernatural thriller “The Reaper” with Hilary Swank.
“After five movies we sat down and said, ‘What do you want to do?’ (Warner) said, ‘Why don’t you get outside financing and make the movies yourself?’ ” Silver recalled.
That was a year ago August.
Richards, who has worked with Silver Pictures for more than a decade, was instrumental in developing the business plan for Dark Castle and in striking the relationship with CIT. Downey is an eight-year veteran of Silver Pictures. Silver Pictures’ Erik Olson will serve as senior VP of production for Dark Castle, while David Gambino has been tapped VP of production.
Silver will continue to make at least one or two movies a year under his Silver Pictures partnership with Warners. Next films under the deal are Vince Vaughn starrer “Fred Klaus,” Nicole Kidman starrer “The Invasion” and “The Brave One,” with Jodie Foster.