The Film Department, a long-anticipated indie entity run by Mark Gill and Neil Sacker, announced Wednesday it has raised $200 million in financing and will open for business by mid-July.
Forgoing domestic distribution, at least for now, the company will focus on production, international sales and financing. Gill and Sacker were colleagues at Miramax in the 1990s; Gill went on to become founding topper at Warner Independent and Sacker was recently chief operating officer at Yari Film Group.
They intend to run the Film Dept. as a partnership, though officially Gill will be CEO and Sacker prexy and chief operating officer.
The West Hollywood, Calif.-based company’s 38 employees will have the goal of putting out six commercial, star-driven titles a year with budgets between $10 million and $35 million.
Hollywood’s recent flood of third-party financing, from hedge funds’ studio slate deals to deep-pocketed individual equity partners, has a few observers concerned about market froth. It certainly has helped make the release calendar more densely packed with would-be hits.
The Film Dept., not surprisingly, takes a more optimistic view, as indicated by statements in a press release Wednesday. It projected that within five years its films would have a collective “production value” of $725 million, essentially average cost multiplied by the number of releases over five years. It also asserted that a selection of 13 films shepherded by Gill and Sacker in their respective careers had averaged $17 million to produce while collecting $77 million at the worldwide B.O. on average.
In an interview, the duo said high- quality films would be the Film Dept.’s distinguishing characteristic.
“There have never been more ways to distribute films than there are now, with the creation of companies such as Paramount Vantage, Overture and Summit,” Gill said. “At the same time, studios are reducing their financial commitments to production, so the combination is ideal for us.”
The topper added, “There will be a shakeout. There always is. But the people who will survive will be those who can produce quality films, which we believe our track record shows we are able to do.”
Sacker noted that the deal is not a closed-end slate arrangement, but rather the start to a company that hopes to be in for the long haul. “We’ve learned a lot of the things not to do,” he said.
Both execs have learned a few lessons during their runs in the film business. After Miramax, Sacker had short-lived stints at the now-defunct Miracle Entertainment and his own startup, Creative Union Entertainment. Gill’s up-and-down tenure at Warner Independent mixed triumphs such as “March of the Penguins” with missteps such as “A Very Long Engagement” and squabbles with Warner Bros. brass.
The pair shrugged off industry talk that their pact had taken a suspiciously winding path to completion since word of their teaming surfaced last summer. “The average time it takes to put these kinds of deals together is three to four years, so 12 months in our case is pretty good,” Gill said.
Allen & Co., Loeb & Loeb, and the Salter Group advised the Film Dept. and completed its financing. As administrative agent, GE Commercial Finance’s Media, Communications & Entertainment business underwrote the company’s senior debt and mezzanine financing, while GE Capital Markets acted as sole lead arranger.
The Film Dept.’s equity investors include Sheikh Waleed Al Ibrahim, Zeid Masri of SilverHaze Partners, Michael Singer, GE, CRG Movie Partners, Mark Esses, David Larcher, Michael Goguen, Richard Landry, Michael Reilly and Rafael Fogel.
Among the films Gill and Sacker have helped oversee are “Crash,” “Amelie,” “The Illusionist,” “Prime,” “Frida,” “Under the Tuscan Sun,” “Good Night, and Good Luck,” “In the Bedroom” and “City of God.”