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Pressman, Ascii Tie Film Financing Knot

Japan’s top computer whiz-kid and one of Hollywood’s most successful independent producers joined forces April 24 in what is expected to be the start of a continuing partnership.

Kazuhiko Nichi’s Ascii Corp. has taken a 33% stake in the 25-year-old Edward R. Pressman Film Corp. and provided it with $15 million of film financing. This represents the publicly owned computer and publishing giant’s first equity investment in a Hollywood entertainment company.

The deal is the first step in a two-stage plan to transform Pressman’s company from a film development unit into a full film financing operation.

“We are now looking for other sources to help raise between $80 million and $120 million for film financing,” explains Dick Sano, president of Ascii’s fully owned subsidiary, Ascii Pictures. “The ideal situation would be for Ed Pressman Film Corp. to own 100% of its films. More money will help to make that possible, although it is too early to say how much of it will come from Ascii.”

Ascii Pictures has bought $7.5 million of the equity in Pressman’s company, while Ascii Corp. has given it a $7.5 million loan guarantee. In return Ascii Pictures has secured an option to buy the Japanese rights to Pressman’s future productions.

It has already obtained his three latest films, John Frankenheimer’s “Year Of The Gun” (starring Andrew McCarthy), David Mamet’s “Homicide” (starring Joe Mantegna) and Mark Frost’s “Storyville” (starring James Spader).

Ascii – headed by the 35-year-old Nishi, who helped set up Microsoft in the U.S. before returning to Japan to start his own company five years ago – is a 5.6 billion yen ($41 million) company with sales of over $500 million last year. It is Japan’s largest computer software outfit, a leading publisher of technology magazines and a computer chip manufacturer.

Last year Ascii bought the Japanese subsidiary of Vestron for $8.6 million and became a film distributor as well.

Nishi, who will sit on the Pressman board of directors, sees the move into the entertainment industry as a logical progression for Ascii. He says there will be numerous spinoffs from the relationship. He is currently developing software to transfer films to digital disks and make them “computer-readable.”

“The future,” he declares, “belongs to software.” Owning a Hollywood studio, as Sony and Matsushita do, has no appeal for him. He emphasizes that his investment is designed to perpetuate the “unsurpassed American talent for creating movies, music, musicals, theater and just pure entertainment.”

Pressman Corp. – which has produced more than 35 films, including “Reversal Of Fortune” and “To Sleep With Anger” – now joins such American independents as Largo Entertainment and Morgan Creek Prods. in tapping Japanese lucre to help fund motion picture programs.

“The deal is tremendous for Ed,” explains Kidder Peabody’s Richard Intrator, who, together with the Long Term Credit Bank of Japan, helped set up the deal. “It gives him extra leverage. He can go two or three steps further down the line before going to a studio with a project.”

The $15 million will be recouped and reused several times in a year as each production is sold to a studio. With five or six productions in the works, that could amount to effective financing of as much as $90 million per annum.

“It is still small,” cautions Pressman. “We are now looking to the second stage – to raising the real finance.”

With Ascii heading the search, Pressman is unlikely to encounter much trouble convincing other Japanese parties to climb aboard.

“It’s a marriage of creative and artistic talent with technology and scientific know-how,” coos Ascii Pictures’ Sano. “Something good has to come out of it.”

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