Despite a worldwide credit crunch, equity funding is still pouring into the movie business.
Media Rights Capital has committed $250 million to fully finance eight films from directors Robert Rodriguez, Ricky Gervais, Walter Salles, Ryan Murphy, Richard Kelly, Bennett Miller and Todd Field. Funds come from a combination of Fortune 500 companies, Wall Street money and private equity, and investors including AT&T, Goldman Sachs and WPP Group.
The eight pics span the comedy, drama, family and horror genres, and MRC partners Modi Wiczyk and Asif Satchu are betting big that distributors will place a premium on high-quality fare to fill holes in their 2008 and 2009 slates. MRC will be racing against the same clock as the majors in trying to get its pics completed in advance of an expected Hollywood work stoppage next June. The MRC duo said they expect to complete production on all eight by next summer.
Distribution rights to nearly all of the pics are available, with one exception: “Bruno,” the Sacha Baron Cohen starrer based on the Austrian fashion reporter character, which, like Borat, originated on Baron Cohen’s “Da Ali G Show.” Universal has already committed $42.5 million to license English-speaking territories, winning a four-studio bidding battle just before “Borat” was released last year.
While MRC has begun to expand into broadband Internet programming and is on the verge of a TV division launch, its eight-pic slate marks the company’s most ambitious step since the company was formed in 2003.
That happened while Wiczyk was an agent at Endeavor, and shortly after his Harvard classmate Satchu was looking for a challenge after selling his 2-year-old startup Suppliermarket.com for $1.1 billion to software technology company Ariba.
MRC started off with about $15 million in capital that Satchu raised, with Endeavor getting a small stake by being a ground-floor supporter and helping get films like “Babel” off the ground.
Wiczyk left Endeavor last November to join MRC. He brought a philosophy in indie financing honed by his stints at Summit Entertainment and Endeavor, while Satchu had legitimacy on Wall Street through his track record of turning a profit for his dot-com investors. The combination has helped MRC raise a war chest of more than $400 million.
Because of Wiczyk’s tie to Endeavor and the fact that the agency continues to hold a minority stake, MRC has battled the perception that it is a financing arm for an agency trying to flout rules that prevent percenteries from producing. The new list of projects won’t entirely quiet doubters, because Rodriguez, Gervais, Salles, Baron Cohen, Miller and Field are all Endeavor clients.
Neither MRC’s Wiczyk nor Satchu see it as an issue, and neither did CAA; That agency reps directors Murphy and Kelly, as well some of the high-profile talent that will headline the films, including Cameron Diaz, Anthony Hopkins and Mirren.
Wiczyk said MRC is in business with UTA, ICM and WMA on upcoming TV and online programming ventures. He said the new films came together after a long courtship of artists he and Satchu wanted to be in business with.
“We get up in the morning, and we call every attorney, agency and manager that we want to be in business (with), relentlessly,” said Wiczyk, 35, who shares an office with Satchu, 36. While MRC has a staff of 25 (most of whom evaluate risk and crunch numbers), Wiczyk and Satchu make the ultimate call on which films they back.
Their pitch to talent boils down to a simple concept that MRC road-tested on “Babel,” and with the upcoming films “Sleuth” and “The Tourist.”
“It comes down to more money, and more control for artists, and this company’s core strength, the ability to valuate films and place them for distribution in an optimal way,” Wiczyk said. For talent, that means equity partner treatment, high upfront fees against gross participation and creative control. MRC doesn’t develop material or take producing credits on films it bankrolls.
Another lure for talent is an ownership deal that no studio would make. Since MRC’s licensing deals give studios short-term distribution rights — Universal has “Bruno” for only 15 years, for instance — MRC’s offer of shared copyright ownership is more meaningful than similar deals that are of lesser value because studios have tied up distribution rights in perpetuity.
The funding cushion gives MRC the luxury of being able to carry through production on any of the eight films in the event they are not pre-sold to a distrib.
Wiczyk and Satchu bankrolled films they feel they can match with the right distributor in deals that will give artists high upfront fees against gross participation. If MRC doesn’t get what it wants, the company will rent a distribution system, Wiczyk said.
“With our deep capital base, we have the luxury of not having to pre-sell all our films,” Wiczyk said. “We have the ability to select the appropriate and optimal deal and distributor for each territory, each media and each project.”
Wiczyk added that MRC gives its filmmakers input into those decisions on distribution.
Satchu noted that “given the uncertainty of film production for the foreseeable future, there is great demand for greenlit, elite projects right now.”
In addition to Baron Cohen’s “Bruno,” MRC will be financing:
n “Shorts,” a film Rodriguez wrote and will direct and produce at his Austin, Texas-based Troublemaker Studios. Family-friendly project in the vein of Rodriguez’s “Spy Kids” series concerns a group of kids who stumble upon a magical device.
n “This Side of Truth,” a comedy that marks the feature directing debut of Gervais (“The Office” and “Extras”). Set in the present day in a world where the concept of lying doesn’t exist, project focuses on a loser who changes his lot when he invents lying and uses it to full advantage to get ahead. Gervais will co-direct with co-writer Matthew Robinson, and Lynda Obst and Oly Obst are producing. Production begins in March.
n “Linha de passe,” a film that “Motorcycle Diaries” helmer Salles is shooting in Brazil, is about a group of brothers who struggle to escape the slums in a variety of ways. Salles is co-directing with Daniela Thomas, who wrote the script with Salles and George Moura. Salles, Mauricio Ramos and Rebecca Yeldham are producing.
n “Alfred Hitchcock and the Making of Psycho,” a film that “Nip/Tuck” creator-exec producer Murphy will direct in January. Hopkins is set to play the legendary helmer and Mirren his wife and longtime collaborator, Alma Reville. Tom Thayer and Alan Barnette are producing the John McLaughlin-scripted drama.
n “The Box,” a previously announced horror film written and directed by Kelly (“Donnie Darko”), will star Diaz and shoot in December, with Kelly and Sean McKittrick producing.
n “Foxcatcher” is Miller’s directorial follow-up to “Capote.” Scripted by E. May Frye, the drama focuses on John E. du Pont, the paranoid schizophrenic heir who, after building the wrestling training facility Team Foxcatcher on his Pennsylvania estate, shot and killed Olympic gold medal-winning grappler David Schultz. Miller will produce with Jon Kilik, with lensing set to begin next spring.
Also on deck is an untitled drama from “In the Bedroom” and “Little Children” helmer Field. Plot’s under wraps, but Field wrote the script and will produce with Leon Vitali. Production begins in the spring.