CIT, Silver ink $220 million pic deal
EmptyBecoming the latest filmmaker to take advantage of the private equity flowing into Hollywood, producer Joel Silver has struck a $220 million deal with CIT Group, which will finance the production of 15 films in the $10 million-$40 million range during the next six years from Silver's genre-oriented Dark Castle Entertainment.
Simultaneously, Warner Bros. Pictures, Silver's longtime home base, said Saturday that it will release the full slate of 15 movies. Silver will fully finance the films, with Warners putting up the costs of P&A while taking a distribution fee. Under the new arrangement, announced by Warners president of production Jeff Robinov, the studio will take worldwide rights to the films, though Silver will retain as many as two international territories where Dark Castle will be permitted to sell the films itself.
Dark Castle has already chosen France as one of the two territories, and StudioCanal has agreed to partner with Dark Castle in exchange for the right to distribute the slate there.
The CIT pact gives Silver sole creative control and green-light approval over Dark Castle projects, and he will own the negatives. "This exceptional arrangement with CIT gives us the creative and financial freedom to significantly increase the number of films on the Dark Castle slate and broaden our focus beyond horror to become a full genre label, encompassing thrillers, action pictures and action comedies," said Silver, who launched Dark Castle in 1999 with co-founder Robert Zemeckis with the release of the horror hit "House on Haunted Hill." A revolving fund, it will be replenished from the profits of the movies, "and if we have a good run, we can keep going," Silver said.
CIT, a Fortune 500 company with $68 billion in managed assets, served as principal investor in the deal, structuring and underwriting $220 million of senior and junior capital representing a substantial portion of the company's capitalization. As arranger, CIT brought together a consortium of financial institutions experienced in the film finance sector. CIT is also a significant investor in Dark Castle's senior and subordinated debt.
The first film under the deal is expected to be "White Out," an action thriller about a lone U.S. marshal stationed in Antarctica who is tracking the continent's first serial killer.
As Dark Castle ramps up its activities, Silver is promoting two execs, Steve Richards and Susan Downey, to co-presidents. Richards will oversee the financial and business side of the company, while Downey will run the creative and production division.
Richards, who has worked for Silver for 12 years, was instrumental in developing the business plan for Dark Castle and in forging the relationship with CIT. "This new financial partnership with CIT is a giant step in the evolution of Dark Castle," Richards said. Downey has been with Silver Pictures, the producer's original production company, for eight years.
In addition, Erik Olsen has been named senior vp production at Dark Castle, while David Gambino will act as vp production. They also will retain their Silver Pictures duties.
Through Silver Pictures, Silver maintains a separate deal with Warners that extends through 2009 and that allows him to pursue his bigger-budgeted projects.
"It doesn't interfere with my overall deal, to make more expensive and visible pictures," Silver said of the Dark Castle deal. "This is part of the commerce end."
"Warner Bros. has enjoyed an extremely successful relationship with Joel Silver, going back 20 years, and he has more than earned our confidence and trust," Robinov said. "Entering into this new phase in our business arrangement gives Joel the kind of well-earned creative freedom enjoyed by very few producers in the film industry, and it lets him do what he does best: make great movies."
Silver added that Warners' commitment to the Dark Castle slate was a key component in the deal. "Without Warners guaranteeing us those slots, we wouldn't be able to make these movies or have this deal. You need to have a definite release," he said. "This could end up being a genre label for Warners. (Warners president) Alan (Horn) and Jeff have been extremely supportive of me. We've done very well together."
Said Wade Layton, managing director of CIT Communications, Media & Entertainment: "We are thrilled to enter into this partnership with Joel and his team. Silver Pictures and Dark Castle's unparalleled track record, combined with their significant relationship with Warner Bros., make this a very extraordinary venture."
Since its inception, Dark Castle has produced such horror films as "13 Ghosts," "Ghost Ship," "Gothika," "House of Wax" and the upcoming supernatural thriller "The Reaping," starring Hilary Swank, which Warners is set to release in March. Silver Pictures is also involved in such upcoming Warner releases as Oliver Hirshbiegel's "The Invasion" and Neil Jordan's "The Brave One," and Silver is one of the producers of the Vince Vaughn comedy "Fred Claus."