Three-year development fund is for $20 mil
As studios dramatically cut back development spending and first-look deals, top producers have begun finding alternative coin to buy projects.
A day after DreamWorks-based Walter Parkes and Laurie MacDonald announced a $10 million development fund with Imagenation Abu Dhabi, sources say Disney-based Jerry Bruckheimer is quietly securing a three-year, $20 million development fund through Barclays Bank. The money will supplement the millions of dollars per year that Disney already provides the “Pirates of the Caribbean” producer. Bruckheimer declined comment.
Separately, Reliance Big Entertainment now has 10 of the 30 scripts it sought when it staked 10 top stars and filmmakers — among them Brad Pitt, Tom Hanks, George Clooney, Julia Roberts, Jay Roach, Jim Carrey and Brett Ratner — in a development fund set up last year by CAA. Reliance’s goal for its $20 million investment is to co-finance the projects with a studio. The producers are incentivized to star or direct: They’ll get their usual wages plus an ownership stake through Reliance’s interest in each film. Production is expected to begin next year on at least one of the projects.
The emergence of new sources of development money is a hopeful sign for producers — and the agents looking to sell them projects.
But individual project wagers, though smaller than production financing bets, have long been regarded as a high-risk investment. Individual projects usually need at least 18 months to percolate, and sometimes a decade or longer. A producer who gets three movies made out of 10 scripts has a high batting average; the funding for those other seven projects is money down the drain.
Two years ago, producer Arnold Kopelson plugged into a multimillion- dollar fund with Texas-based Equus Total Return. His goal was to develop projects that would trigger his established gross producer fee without the slowdown of requiring a studio to say yes. He has acquired nine projects out of 2,000 submissions and just set the first, “Sleeper Spy,” at CBS Films.
Kopelson believes Equus’ entire investment in Kopelson Entertainment will pay off with one success. The fund recoups cost and interest on a script when the project is acquired by a studio. Later, the fund also gets a piece of Kopelson’s backend.
For Parkes/MacDonald, the coin from Imagenation frees the banner to use some of its development resources in other places. The deal was made possible by Parkes/MacDonald’s move from an exclusive to a first-look relationship with DreamWorks when that studio exited Paramount this time last year.
“It has become clear to me over the last five months that every aspect of moviemaking is under scrutiny, including development,” Parkes said. “It’s always wise to be fiscally responsible, but there’s something potentially destructive about that. Production and distribution models might change, but success will always come down to quality of script.”
Although Reliance is poised to co-finance DreamWorks product, Imagenation will also be able to invest in Parkes/MacDonald-produced DreamWorks projects.
“Should DreamWorks seek equity co-financing, Imagenation would be positioned to provide it. If not, the fund would vest for profit in the screenplay itself,” Parkes said. “If we make a film for another studio, we can bring the development investment and possibly equity co-financing. This puts us and Imagenation Abu Dhabi in a position neither of us has been in before.”