×

Fox closes $400 million co-financing pact

Deal will help fund the next two 'Avatar' films

Marking the first slate financing arrangement to close since the financial meltdown of 2008, 20th Century Fox has made a deal for just north of $400 million to help fund nearly all its films over the next five years, including the next two “Avatar” pics, multiple sources have confirmed to Variety.

Financial guru Chip Seelig brought the coin to Fox, and it’s not the first time he’s raised a sizeable amount of money for the studio, either: The pair have a relationship dating back to 2005, when Seelig arranged a $400 million slate deal as a then-partner of financial firm Dune Capital Management. Seelig left Dune about 18 months ago to start new funding ventures.

The latest deal effectively replaces the longstanding Dune structure, which has been renewed a number of times since its flagship run. Although Dune will continue to earn money from Fox films it’s helped pay for (And can re-invest that money into future studio pics), the Gotham-based firm has elected not to renew its co-financing pact, according to topper Steven Mnuchin. Dune is also in the middle of a refinancing that could put more money into Fox pics, as Variety reported in August. At that time, both sides appeared to be close to yet another extension of their relationship.

New deal also marks Fox’s first major financing under the sole chairmanship of Jim Gianopulos, who took over running the studio after co-topper Tom Rothman left his post at the end of last year. The duo ran the studio at the time of its first pact with Dune.

Magnetar Capital provided a chunk of the funding in Seelig’s latest arrangement, a source with knowledge of the transaction confirmed, and it’s understood that the Chicago-based group provided the majority of the money. As part of the arrangement, Seelig will put some of his own equity into the slate.

Seelig’s investors will participate in almost all of Fox’s films for the next five years, according to multiple sources close to the deal. Studio will typically take an 11% distribution fee, according to those briefed on the matter, and investors will usually have the option of funding between about a quarter and half of the budget per film. Deal does not include animated fare and certain smaller-budgeted pics, as is typical for Fox.

Seelig’s departure from Dune left oversight of the Fox relationship to Mnuchin, a former Goldman Sachs fund manager who also serves as chairman of One West Bank. Mnuchin and Seelig have a long history together, both from their time at Dune and at Goldman, where Seelig also worked.

Seelig is also currently holding discussions with banks about putting between $300 million and $400 million of senior debt into the deal, according to sources close to the talks. And the overall pot of money could grow, as Seelig will continue his fundraising efforts in the hopes of a longer-term partnership.

Fox has its eye on the long-term too. In Dune, the studio counted one of the longest-running modern financing partnerships of any of the majors. Dune participated in the first “Avatar,” and the relationship is widely considered to be one of the most successful co-financing pacts from the last few years. Some observers credit that to a lack of mezzanine financing in the deal’s structure, others to Dune’s access to Fox’s slate – since the fund could participate in just about any film, a juggernaut like “Avatar” and other hits more than helped make up for misfires.

As is typical for investors, Dune will earn money from its Fox library for years, although the firm has held some discussions with Fox about the studio buying out those future cash flows.

Seelig’s deal is the first slate financing arrangement to be completed in years. It also comes at a time when all the majors, with the exception of Disney, are aggressively pursuing outside cash. But capital markets have shrunk, and large-scale equity has vastly dwindled since the slate heyday of between 2005 and 2009, when every studio nabbed hundreds of millions of dollars from third parties.

While all the majors are meeting with potential investors, none appear close to a deal.

Sony and Universal are still talking to a group led by attorney John LaViolette that hopes to have around a billion dollars to divide between the studios, as Variety reported in March. But observers are mixed on whether an arrangement is likely to materialize.

More Film

  • Don Edkins, documentary filmmaker

    Documentary Filmmaker Don Edkins on ‘Creating an African Voice’ 

    DURBAN–For the 10th Durban FilmMart (DFM), the industry program of the Durban Intl. Film Festival, a new strand was created to look at the unique challenges and opportunities facing documentary filmmakers in Africa. The two-day program, Durban Does Docs, offers a series of conversations, seminars and workshops with an intensive focus on the aesthetics, funding, distribution [...]

  • A Faithful Man

    Film Review: 'A Faithful Man'

    French actor Louis Garrel has been married twice, first to Iranian talent Golshifteh Farahani, and now to model-cum-actress Laetitia Casta. He has also directed two features, the first a free-wheeling love-triangle comedy called “Two Friends” in which Garrel plays the cad who comes between his best friend and the object of his obsession (played by [...]

  • LGBTQ Film Festival Outfest Opens With

    LGBTQ Film Festival Outfest Opens With Documentary About Gay Porn Shops Circus of Books

    Granted, the red carpet at the opening night of Outfest in DTLA may not have been the most star-studded but it was without a doubt the most diverse, inclusive and, yes, fabulous. “I’ve never been here before,” admitted “RuPaul’s Drag Race” vet Trixie Mattel, who stars in the documentary “Moving Parts.” “It’s supposed to be [...]

  • Editorial use only. No book cover

    Russ Tamblyn's Career Had Legs After Childhood

    With an acting career that spans work for Cecil B. DeMille and Joseph Losey to Quentin Tarantino and David Lynch, Russ Tamblyn’s creativity and longevity is proof that there’s life after child stardom. In Tamblyn’s case, there’s also been a bounty of juicy film and TV roles long after his legendary legs no longer kicked [...]

  • Olivia Wilde Booksmart Director

    Film News Roundup: Olivia Wilde to Direct Holiday Comedy for Universal

    In today’s film news roundup, Olivia Wilde has landed another directing gig following “Booksmart” and revenge thriller “Seaside” and “Woodstock: The Directors Cut” get August release dates. PROJECT LAUNCH Olivia Wilde will direct and produce an untitled holiday comedy project for Universal Pictures with her “Booksmart” partner Katie Silberman. Universal outbid five other studios for [...]

  • Choas Charles Mansion and the CIA

    Amazon Studios Takes Film Rights to Manson-Centered Drama 'Chaos' (EXCLUSIVE)

    Just in time for the 50th anniversary of the grisly murders executed by the followers of Charles Manson, Amazon Studios has optioned film rights to a nonfiction title about a journalist who spent decades obsessively following the case. The studio will adapt “Chaos: Charles Manson, the CIA, and the Secret History of the Sixties,” from [...]

  • Sword of Trust

    Marc Maron on 'Sword of Trust,' Lynn Shelton and Conspiracy Theories

    Marc Maron has interviewed everyone from Bruce Springsteen to President Obama, so he’s probably learned a few things about being a good interview. Of course, as he points out, he generally has over an hour to talk leisurely speak with his guests in his home and draw out stories beyond the public narrative; it’s a [...]

More From Our Brands

Access exclusive content