Zazen, Lereby raising $60 mil for 10 films

Coin split between Brazilian equity fund, tax incentives

“Elite Squad: The Enemy Within” director Jose Padilha is teaming via his Zazen Prods. with Daniel Filho’s Lereby Prods. to raise $60 million to finance 10 Brazilian movies over the next four years.

The partners are putting the finishing touches to a $30 million private equity fund backed by Brazilian investors, Padilha said during the Rio Festival. The country’s battery of film tax shelters will supply the other $30 million.

Most movies will be helmed by Brazilians in Portuguese, targeting the local market. All will be released in Brazil via Nossa Distribuidora, the op announced Tuesday at the Rio Fest whose founding partners include Zazen and Lereby, plus Fernando Meirelles’ 02 Filmes, Conspiracao Films, Morena Films, FL & MAM Participacoes and Vinny Films.

The production drive, Padilha said, “will help Nossa work. We need to create a volume of films so that Nossa has leverage to book movies with exhibitors.”

Slate’s first titles will be announced in the next few weeks, Padilha said. One early production will be a biopic on Rickson Gracie, the undefeated Mixed Martial Arts champ.

Zazen and Lereby will produce around movies each. The rest will be co-productions with third-party companies.

Receiving an average $6 million investment per pic, part of which will also cover P&A costs for Brazil, the productions will be higher-end but not astronomical for Brazil, where blockbuster “Elite Squad: The Enemy Within” — the country’s highest-grossing pic — cost $10 million.

“Part financed by an equity fund, the slate has to be diversified — mixing romantic comedies, action movies, dramas — making the investment safe but offering good upside possibility,” Padilha said.

Padilha said Zazen and Lereby would not have been able to mount the equity fund without Nossa.

Nossa allows B.O. revenues to go straight to producers who pay Nossa a distribution fee and retain distribution rights to their productions.

“Via Nossa the revenues for producers are five-to-10-times higher,” Padilha said.

Nossa is modelled on Padilha’s direct distribution for “Elite Squad: the Enemy Within,” the follow up to 2007 hit “Elite Squad.”

“I’ve tried 10 times to raise private equity money to make productions in a traditional way,” Padilha said. “Nobody wanted to look at it. As soon as we did direct distribution on ‘Elite Squad 2’ and announced Nossa, everybody wants to do it.”