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In love with the libraries

More investors turn page

Investors’ fascination with Hollywood libraries continued Wednesday as Qualia Partners, a private-equity group led by former Artisan CEO Amir Malin and prexy-COO Ken Schapiro, bought the libraries of Rysher Entertainment and Gaylord for about $100 million.

These libraries comprise rights to a bevy of relatively new, modestly successful pics and skeins, as well as a handful of blockbuster titles.

Rysher library, which entrepreneurs Mark Cuban and Todd Wagner sold to Qualia, contains worldwide rights to pics Rysher had fully financed, such as indie hit “Big Night”; shared rights to Paramount co-productions like “Primal Fear” and “Private Parts” (for which Par will also collect a distribution fee); and foreign rights to hit HBO series like “Arliss” and “Sex and the City.”

About 40 films and a handful of skeins are included in the library, which was owned by Cox Broadcasting for nearly a decade until the company sold to Cuban and Wagner in 2001.

Gaylord library consists of shared worldwide rights to pics co-produced with Warner Bros., such as “What a Girl Wants” and “The Divine Secrets of the Ya-Ya Sisterhood” (for which Warners also collects a distribution fee), and full world rights to pics from defunct production company Pandora Films.

Also included are worldwide rights to arthouse hit “Like Water for Chocolate.” More than 150 pics fall into the Gaylord collection.

Pact also includes sequel rights for both libraries, which Qualia said it would shop to producers rather than develop itself, and a host of unproduced scripts from Pandora that were put on hold when the company folded.

Malin said he didn’t yet know the most profitable areas of monetization but imagined new technology and a growing international appetite would make the investment a sound one.

Company will set up an L.A. office under chief operating officer Schapiro, and Qualia managing director Patrick Gunn and VP David Cragnotti will oversee library operations. Acquisition is nascent company’s first major Hollywood move.

Deal was handled by L.A. investment bank Salem Partners.

Wall Street has been gaga over library pics lately as investors ranging from George Soros to Providence Equity Partners have snapped up rights to old and new catalogs. Financial institutions see the potential for strong growth in a time of uncertainty for new entertainment.

But Malin cautioned that the success of the properties turned on market conditions outside a buyer’s control and that investors need to be aware of the risks. “If you’re buying real estate, the value could go up or down, and the same goes for libraries. You’re betting on the future,” he said.