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With Miramax green, ‘Gangs’ ready to rumble

Initial may invest in Scorsese-helmed DiCaprio starrer

Ensuring a greenlight for the project, Miramax Films has agreed to co-finance and handle domestic distribution for Martin Scorsese’s “Gangs of New York,” the dark period pic set to star Leonardo DiCaprio.

Miramax’s corporate parent, Walt Disney, which owns the film and has funded its development, chose earlier this year to take on international distribution of the pic and had been looking for a domestic partner to help defray the film’s reported $90 million budget.

However, in another change in direction for the long-gestating project, Disney is in late-stage negotiations to sell international distribution rights to Initial Entertainment Group, the Los Angeles-based foreign sales and production outfit, at a cost of $65 million.

Financial backing

Chase Manhattan Bank is understood to be guaranteeing Initial’s stake, and, according to sources close to the deal, will lend $30 million (the estimated amount of Initial’s pre-existing line of credit with the bank) of that amount, with Initial fronting the remaining $35 million. Initial — whose president, Graham King, and chief financial officer, Colin Cotter, have been spearheading the deal — will own all international distribution rights for an unspecified term, with the copyright eventually reverting back to Disney.

“Gangs” will be the biggest pic Initial has ever handled. The company, which has backed such pics as “Very Bad Things,” “Gun Shy,” “Savior” and “If These Walls Could Talk,” can afford a hefty tab for “Gangs” because earlier this year the firm sold a 49% stake to Splendid Group, the German distributor that recently staged a successful IPO. Under the partnership, Cologne-based Splendid and Initial will co-finance pics for worldwide distribution.

It’s unclear how much of the remaining cost of the film will be shouldered by Miramax and how much Disney will kick in. But with its stake in the film, Miramax will control the production of “Gangs,” which now looks on track to go before the cameras in February at Cinecitta studios in Rome, where production designer Dante Ferretti has already been at work reconstructing Gotham in the 1800s.

Miramax’s involvement was solidified Friday evening following a meeting that included Scorsese, Miramax co-chairman Harvey Weinstein, Disney Studios chairman Joe Roth and Rick Yorn, partner in Artists Managment Group that represents DiCaprio and Scorsese.

Miramax and Initial put to rest the myriad financing and distribution angles that have been attempted to finance the film over the past year — a series of events that observers have needed a score card to follow.

Disney and Scorsese’s reps originally approached Warner Bros., where the helmer had a commitment to direct his next film, to co-finance “Gangs.” Warner turned down the offer but allowed Scorsese a period of time to try to set up “Gangs” before asking him to return to a WB project.

Fox takes a pass

While Sony, Paramount and MGM flirted with handling domestic on the project, besides Miramax, the only other studio to make a concerted effort to mount the pic was 20th Century Fox. Fox eventually passed after weeks spent reworking the script and negotiating budget concessions. It’s understood that the pic’s budget was trimmed to approximately $82 million, but Fox still felt that, although the studio will have distributed three of DiCaprio’s recent films (“Romeo + Juliet,” “Titanic” and the upcoming “The Beach”), it was too big a risk to take.

With Fox’s involvement in jeopardy of falling apart, it’s understood that ICM’s Ken Kamins stepped in to present AMG and Disney with the idea of Initial taking over co-financing responsibilities and shouldering the majority of the pic’s costs.

With Kamins and Initial structuring an arrangement by which the domestic distributor would not have to take on as much as half of the pic’s budget, Disney was able to approach Miramax with the film. According to sources who have read the script, Miramax was Disney’s best hope for distributing the “Gangs,” while keeping the film and relationships with Scorsese and DiCaprio within the Disney family.

While AMG will not serve as a producer on “Gangs,” the nascent management-production firm helped put together the project and had a lot riding on it: With two of its most prominent clients (DiCaprio and Scorsese) attached to a film that most studios, including Disney, were wary to take on because of its violent subject matter and its $90 million budget.

Scorsese and his “Age of Innocence” collaborator Jay Cocks have been developing the project for several years at Disney. The most recent Cocks draft of the screenplay is understood to have beefed up a role intended for Robert DeNiro, with another being targeted for Cameron Diaz. The pic takes place in 19th century New York and chronicles the city’s original gangsters, the Irish and Italian immigrants who began organizing street gangs to fight for control of the city’s streets.

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