Financing woes are all too reel for Hollywood studios (Dinosaur Media DeathWatch™)

Los Angeles Times ^ | July 18, 2008 | Claudia Eller and Josh Friedman

[abb]

Hollywood is quickly losing its grip on the kind of easy money once readily available through Wall Street.

The collapse of Paramount Pictures' $450-million film financing deal underscores how dramatically the global credit crunch is prompting weary investors and several industry-friendly banks to shy away from a popular form of funding that has fueled Hollywood's production growth in recent years.

The pullback could set the studios scrambling to find alternative sources of capital to help mitigate risk on their movie slates as filmmaking and marketing costs continue to climb.

With the debt markets depressed and money drying up, studios like Paramount Pictures and MGM -- which for months have been looking to raise new "slate" financing -- could find themselves living on leaner movie budgets, making fewer pictures or turning to offshore sources such as India.

"It's not a great time for the debt markets, especially for the volatile film business," said media analyst Richard Greenfield of Pali Research. Investors, he said, are learning the hard way that Hollywood is "still not a great-return-on-investment business."

Deutsche Bank, which had been working on the Paramount deal, is one of several banking institutions, along with Merrill Lynch & Co. and Morgan Stanley, that have parted ways with their high-profile film financing teams since the end of last year.

Banks and hedge funds have accounted for more than $10 billion in film financing packages since 2004 for major Hollywood studios such as Sony Pictures, 20th Century Fox, Universal Pictures and Warner Bros.

Roger Smith, an analyst at investment research service Global Media Intelligence, agrees. "As an investor these days you don't want anything exotic like films," he said.

snip

[abb]

Follow the money.

[abb]

ping

[REPANDPROUDOFIT]

Maybe they will finally have to make some decent entertaining films!!!

[abb]

ping

[hsalaw]

Could it also be that no one wants to go see their cr*ppy anti-American, anti-military movies? All that’s on the big screen this summer are comic book hero movies. Oh, yes, and the latest Mummy movie. I like the Mummy movies.

[StormEye]

Good bye to the twenty-million per movie actor and actress.

[Don Corleone]

Obama, Soros and Move on.org have plenty.

[IronJack]

It’s possible that average men and women got tired of throwing their money away to finance some West Coast dilettante’s self-indulgence.

[Melchior]

The IFC channel (131) on Dish Net is to be commended for screening some of the most vulgar, scatalogical, juvenile and superficial movies produced in the United States over the last decade. To think that this sordid crud is sold and screened abroad makes me cringe.

[Prophet in the wilderness]

They might actually have to work for a living.

[BurbankKarl]

Yes, they kept saying it was no big deal....but that is a lot of money.

http://www.tropicthunder.com/home.html

This movie is already done....but I guess it might open in less places overseas....I think it looks funny

[dynachrome]

I wonder if Eddie Murphy’s latest will sink the studio that made it?

[monkeyshine]

There are billions of dollars to be made in the film business. The fact that the studios cannot find financing to make films may have more to do with the fact that “investors” in movies seldom get any of the profit.

[razorback-bert]

I haven’t seen Rachel Weisz in any of the ads, makes for a poorer movie for me.

[dennisw]

Money’s too tight to mention

[Leisler]

I rent DVD’s at those ‘Redbox’(’s).
One dollar.
That’s about the right price.

[denydenydeny]

You can’t overlook the role of ideology in this.

The studios have made some enormously profitable films the last year and a half (I Am Legend, Transformers, 300, The Simpsons Movie, Ratatouille, Iron Man, etc.), so, you would think, they would have no trouble getting financing.

But then you look at the movies that reflected the predominant political sentiments of the Hollywood community, it’s a different story. Look at the total grosses of all the anti-Bush movies during this period:

Lions for Lambs $15,000,115

Stop-Loss $10,915,744

Rendition $9,736,045

In the Valley of Elah $6,777,741

Redacted $65,388

Home of the Brave $51,708

Grace Is Gone $50,899

Battle for Haditha $8,443

These represent, basically, the frittering-away of profit in the name of politics. We have the example of New Line, which made insane money off the Lord of the Rings movies, being PUT OUT OF BUSINESS by their atheist wet-dream The Golden Compass ($200 million budget, $70 million domestic gross).

But do they learn? Apparently not. They seem to want to go down with the lefty ship.

[EEDUDE]

The wife and I recently discovered Red Box. And yes the price is about right. I figure if I rent three movies and one turns out to be good, I did OK.

Popcorn (old fashioned popped in a pan) and a few good movies makes for a good entertaining evening at low cost.

I just won’t pay what theaters ask anymore.

[abb]

Money’s too tight to mention

Cut back!

http://www.youtube.com/watch?v=Q-BtTn-CNZE&feature=related

[abb]

A more better version.

http://www.youtube.com/watch?v=iqbrNwF8LJg&feature=related

[donna]

That’s the truth.

[cla62]

All the studios have to do is to make sure one of the actors dies a few months before each new movie release. Then they can use him/her much like they're using ledger in the latest batman movie. This mediocre movie is being touted as the next best thing to sliced bread, and batman himself isn't even in the previews!! And to boot the dead actor will always be guaranteed a posthumous oscar just for making the movie studios mucho dollars!! Immortalized forever.

[hsalaw]

You’re right. Evelyn is being played by someone else.

[donna]

and batman himself isn't even in the previews

Wow, that's right! Actors better watch their backs.

[GOPJ]

But then you look at the movies that reflected the predominant political sentiments of the Hollywood community, it’s a different story. Look at the total grosses of all the anti-Bush movies during this period: Lions for Lambs $15,000,115 Stop-Loss $10,915,744 Rendition $9,736,045 In the Valley of Elah $6,777,741 Redacted $65,388 Home of the Brave $51,708 Grace Is Gone $50,899 Battle for Haditha $8,443

I'm not interested in putting out money and time to be lectured and insulted either. Not only do I resent the liberal preaching and propaganda films - but those films keep me from bothering to see the ones that might be entertaining.

[GOPJ]

Who’s Ed Biersmith?

[abb]

Dr. Edward L. Biersmith is a good friend of mine who is a retired college chemistry professor. He’s a kindred spirit to us FReepers who I met through a local coffee club. Very incisive, thoughtful and cynical enough to know how the world works.

This is one of his dictums that I have taken to heart. It is spot on.

[GOPJ]

Thanks - and you’re right - it is spot on.

[Libloather]

Hollywood To Shut Down To Save Planet

[Sir_Ed]

New Line is actually gone?

Did Peter Jackson ever get his full cut from LOTR?

He’s not directing The Hobbit, right? Is that ‘cause New Line is gone?

Thanks,

Ed

[Verloona Ti]

The two Hobbit movies are to be directed by Guillermo del Toro, the guy who did Pan’s Labyrinth and the Hellboy movies. filming starts (IF it ever starts...) in 2009. (I’ll believe it when I see it, after several years now of false starts and delays.