Studio gets $300 mil in prod'n coin
Paramount has closed a $300 million film financing deal with international investment bank Dresdner Kleinwort for production coin that will fund 30 films for the studio.
Deal, dubbed Melrose 2, includes projects from Par’s film divisions Paramount Pictures, DreamWorks, MTV Films and Nickelodeon Movies. Not covered in the pact are specialty films from indie labels Paramount Vantage and Paramount Classics.
While the deal is said to have just closed, money from Melrose 2 has already been put in play at Paramount to cover production costs on nine pics so far, starting with the March 2006 release “Failure to Launch.”
Other pics include “She’s the Man,” “Mission: Impossible III,” “Nacho Libre,” “Barnyard,” “World Trade Center,” “The Last Kiss,” “Jackass: Number Two” and upcoming rollout “Flags of Our Fathers.” Upcoming pics to fall under the fund are “Freedom Writers,” “Norbit,” “Shooter” and “The Spiderwick Chronicles.”
Melrose 2 is a follow-up financing arrangement to the 2004 Melrose fund that raised $225 million for 25 Paramount pics. That fund was arranged by Merrill Lynch. Dresdner Kleinwort arranged the senior notes on the first fund, paving the way for their lead involvement on the current pact.
“We came up with a creative structure and added a few more bells and whistles than the last transaction, which made it very appealing to the studio and the investor community,” said Laura Fazio, Dresdner Kleinwort managing director and head of media, global banking.”We have great confidence in Brad Grey and the slate of films and that was reaffirmed by the investor community with this transaction.”
Current pact is similar in structure to 2004’s $225 million fund, sources said, with money being used to fund a “substantial part” of the budget of each of the 30 films in the slate with no exclusions expected. The source added that because this fund provides $75 million more than the previous arrangement is a signal that there is more upside to being in business with Paramount, which has bolstered its production ranks with the acquisition of DreamWorks and new film divisions in MTV Films and Nickelodeon Movies. The latter two companies previously acted as studio-based production entities.