It was only a year ago that Village Roadshow was on the brink of being unable to bankroll movies.
Not anymore: The Australian independent financing and production company has raised $1 billion in a credit facility to fund its current and future slate of pics that it will distribute primarily through Warner Bros.
JP Morgan Chase, Rabobank and Bank of America Merrill Lynch were the lead financial outfits arranging the funds, which easily stands out as one of the first major credit facilities to be assembled since the recession hit Hollywood.
In October, Relativity Media raised a $300 million credit facility through Comerica Bank and Union Bank to fund co-productions with Universal Pictures.
Village Roadshow will use the new capital to pay for its portion of “Sex and the City 2,” which struts into theaters this weekend, as well as the upcoming “Cats and Dogs 2” in 3D, “Legend of the Guardians: The Owls of Ga’hoole,” also in 3D, and “Life as We Know It,” all on the schedule for this year, while it also will back 3D-toon “Happy Feet 2” that unspools next year.
Outside of Legendary Pictures, Village Roadshow has been one of Warner Bros.’ major co-financing partners since 1998. It’s helped fund 61 films there, including the “Matrix” and “Oceans” franchises, “Where the Wild Things Are” and “Sherlock Holmes.”
Overall, VR has a library of 65 pics through an initial credit facility it first put together in 1997. It also operates theme parks and a theater chain.
“We are in the business of making movies,” said Bruce Berman, chairman and CEO of Village Roadshow Pictures. “This new financing enables us to expand upon the solid foundation we’ve established within the industry and grow our slate of tentpole and star-driven films.”
That foundation wasn’t always so solid. Around this time last year, the credit crisis meant that Village Roadshow was unable to come through with the financing for “Get Smart,” “Gran Torino,” “Nights in Rodanthe” and “Yes Man” that it partnered on with Warner Bros., leaving the studio to cover at least $120 million in costs (Daily Variety, April 29, 2009).
The financial situation was so dire that Warner Bros.-parent Time Warner was “unsure whether this co-financing partner will ultimately secure the funding for amounts due on these four 2008 productions or the funding it had committed for films slated for release in 2009,” it said in a quarterly report. “The difficulties in the credit market may also reduce the company’s ability to attract other financial partners to co-finance its films.”
The studio was more upbeat, saying in a statement, “This is simply an issue of the times we’re in,” adding that it fully expected Village Roadshow to secure future funding.
Village Roadshow was restructuring its debt then and anticipated securing a new line of credit within weeks, but that took much longer than expected.
“We have had a long, successful relationship with Village Roadshow, and are very pleased they will continue to be our partners in making great movies,” said Barry Meyer, chairman and CEO, and Alan Horn, president and chief operating officer of Warner Bros. Entertainment.
Either way, Village Roadshow is on secure footing at a time when film financing is still hard to come by.
“At a time when capital is at a premium, we’ve managed to attract the confidence of a diverse group of investors and secure significant financing,” said Greg Basser, CEO of Village Roadshow Entertainment Group, the parent of Village Roadshow Pictures Group and Concord Music Group. “We are grateful to all involved with the close of this deal and to our unwavering partners at Warner Bros.”