U.K. bank will co-finance around 20 movies
New Line Cinema has reached a $350 million deal with the Royal Bank of Scotland to co-finance about 20 films for the minimajor over the next two years, including 2007 releases “Hairspray,” “Rush Hour 3” and “The Golden Compass.”
The bank funds will be in addition to the annual allocation New Line receives from Time Warner, estimated at about $500 million for 12 to 15 pics with an average cost of $35 million to $40 million. The new financing’s designed to move New Line toward producing more tentpole pics but won’t change the slate’s overall character, according to co-chair Michael Lynne.
“It will enable us to do a few more tentpoles, which have been a fairly small percentage of our slate, but it won’t change our basic approach” Lynne told Daily Variety. “We’ll still be producing films that push the envelope.”
“The Golden Compass,” with a pricetag of $150 million, represents the biggest investment New Line’s made since financing “The Lord of the Rings” trilogy.
Lynne said the RBS funds will likely lead to New Line increasing the number of films it releases annually. “We’ll have the wherewithal to be a little more opportunistic,” he added.
RBS will invest equity and share in the profits from the New Line movies, covering a wide range of genres and production budgets. The 2008 releases already earmarked for co-financing include “Inkheart” with Brendan Fraser, “Ghosts of Girlfriends Past” with Matthew McConaughey and “Semi-Pro” with Will Ferrell.
“The ability to work with New Line Cinema on this exciting transaction is a fantastic opportunity for the Royal Bank of Scotland and underlines our commitment to New Line as filmmakers of the highest caliber,” said Alex Brown, managing director and head of structured asset finance, media & entertainment at RBS.
Although RBS has a longstanding commitment to the film business, this is the first time the London-based bank has taken the lead position in arranging this kind of equity financing for a studio slate. “This is going to be a huge area for us, and we’ve got two or three new deals coming up,” Brown said.
Lynne said the deal is a natural fit for New Line because of the familiarity among execs from RBS previously having set up bank lines for the minimajor.
Deal comes a day after Relativity Media Holdings announced a co-financing pact with Citigroup to invest as much as $1.1 billion in as many as 100 films.
“We welcome the Royal Bank of Scotland’s involvement in our exciting lineup of films,” said Lynne and New Line co-chair and co-CEO Bob Shaye in a joint statement. “We look forward to a successful, mutually beneficial financial relationship.”