Deal follows Legendary departure
Warner Bros. has closed a financing deal with RatPac-Dune Entertainment, a four-year partnership with Dune’s Steven Mnuchin, filmmaker Brett Ratner and Australian billionaire James Packer, to fund up to 75 upcoming films.
The total funds are expected to be in the $450 million million range, Mnuchin told Variety. He expressed optimism that the deal could be extended — as Dune’s pact with 20th Century Fox was on multiple occasions.
The RatPac-Dune coin comes three months after the studio and longtime partner Legendary Entertainment agreed to terminate their longtime co-financing partnership at the end of the year.
Warner’s “Gravity,” starring Sandra Bullock and directed by Alfonso Cuaron, is the first title covered by the new deal. “Gravity” opened the Venice Film Festival amid stellar reviews and will go into wide release Friday.
The co-financing arrangement also covers boxing comedy “Grudge Match,” which opens on Christmas and stars Robert De Niro and Sylvester Stallone. It includes films from all genres and all budgets including New Line — but will exclude projects from other WB’s co-financing deals with Village Roadshow and Gulfstream, the studio’s distribution pact with Alcon and titles derived from the Harry Potter, Lord of the Rings and Hobbit franchises.
“We are very pleased to be entering into this relationship with RatPac-Dune Entertainment,” said Warner Bros. CEO Kevin Tsujihara in a statement. “This agreement gives us increased strength and flexibility in the motion picture division and an even greater ability to manage risk as we continue to produce high-quality filmed entertainment for the global audience. We look forward to working with their team as we move forward in this exciting new partnership with a truly great organization.”
Warner Bros. has usually finished in first or second place at the domestic box office over the past decade. The studio noted that it has six films that have crossed the $200 million mark globally this year: “We’re the Millers,” $238 million; “The Conjuring,” $297 million; “The Great Gatsby,” $350 million; “The Hangover – Part III,” $360 million; “Pacific Rim,” $408 million; and “Man of Steel,” $663 million.
Mnuchin said in a satement, “Warner Bros Pictures has an incredible track record of success with the most valuable franchise properties, the best relationships in the creative community and an extremely talented executive team.”
Variety reported on July 9 that Warner Bros. was in talks with Bank of America Merrill Lynch and Dune Capital for a major co-financing deal that would help replace Legendary’s coin and that Bank of America had been working with WB for months to put together a roughly $550 million co-financing vehicle with Dune helping to raise roughly $150 million of equity.
Mnuchin told Variety on Monday that both sides shook hands on the outline of a deal several months ago.
Dune pacted in 2005 wth 20th Century Fox on a deal that was renewed multiple times. That pact helped pay for the juggernaut “Avatar,” “Life of Pi” and dozens of other pics at that studio but was not renewed this year as Fox opted for a slate deal with financial guru Chip Seelig.
Legendary began shopping its deal in June after deciding not to renew at WB. It announced in July that its new deal would be at Universal; Variety reported in August that Legendary was planning to spend $275 million annually in U’s films and its own properties within the first two years of the deal and $350 million a year during the next three years.
The WB-Legendary pact dates back to 2005 and provided the funds for several blockbusters including “Inception,” “Man of Steel,” “The Dark Knight Returns,” “The Dark Knight” and the “Hangover” series.
Ratner is best known for directing the “Rush Hour” trilogy and also helmed “Red Dragon,” “X-Men: The Last Stand” and “Tower Heist.” He’s moved into production in recent years via his Rat Entertainment banner with credits on “Mirror Mirror” and “Horrible Bosses.”
Ratner is also directing and producing the upcoming “Hercules,” starring Dwayne Johnson, for MGM and Paramount. He teamed up late last year to form RatPac Entertainment with Packer, the chairman of Crown Limited, one of Australia’s largest resort and entertainment groups.
Packer is the son of the late Australian media mogul Kerry Packer.