Concord, Roadshow link arms
EmptyVillage Roadshow Pictures Group, the U.S.-based film production division of Australia's Village Roadshow Ltd., will merge with Los Angeles-based independent music firm Concord Music Group in a deal set to close by late October to form Village Roadshow Entertainment Group, executives said on Monday.
The partnership, announced by Concord owners Norman Lear and Hal Gaba and by Village Roadshow chairman John Kirby and CEO Graham Burke, will see VRPG and Concord continue to operate as stand-alone entities.
It will "couple a broad film library with a vast catalog of master recordings and publishing rights," Kirby said, creating a "combined music-film powerhouse that has an exciting future."
The new group's assets include such features as the "Matrix" trilogy and the "Ocean's Eleven" series, from its co-productions with Warner Bros., and titles like "Mystic River"; on the music side, it includes Concord's 5,000 albums from 21 record labels and 6,000 music publishing rights, focused on such pop, classic rock and artists as Creedence Clearwater Revival, John Coltrane and Miles Davis.
Greg Basser will retain his CEO role at VR Pictures Group and take on the same title at the new VR Entertainment Group.
Also included is Concord's stake in the Hear Music label created earlier this year with Starbucks Coffee, which already has signed Paul McCartney, Joni Mitchell and James Taylor and released the Grammy Award-winning Ray Charles project "Genius Loves Company."
VREG will be owned by VRL, Norman Lear and Hal Gaba's media investment firm Act III Entertainment, private equity firms Tailwind Capital Partners and Clarity Partners, and by Michael Lambert's Lambert Entertainment.
Village Roadshow will transfer its 50% stake in VRPG to take a 39.9% stake in the merged entity. Act III, Clarity and Lambert, through their Crescent Entertainment Group, will take a 48% interest, while Tailwind will hold the remaining 12.1%.
Concord chairman Gaba, and VRL's Burke will co-chair VREG. Glen Barros will continue in his role as president and CEO of Concord.
VRPG's production joint venture with Warner Bros. is unaffected by the deal. Bruce Berman remains chairman and CEO of Village Roadshow Pictures Entertainment.
VREG has funding commitments from investment bank JP Morgan Chase NA to raise about $225 million in debt to fund cash payments, refinance existing Concord debt and provide continuing working capital requirements.
In addition, VRPG is supported by a AUS$1.4 billion financing facility lead by Rabobank and MBIA.
The deal, which is expected to be finalized by the end of October, comes after Village Roadshow announced last week (HR 8/31) that VRPG reported a loss of AUS$55.8 million ($45.7 million) for the fiscal year to June 30.
That loss resulted largely from of a joint decision between VRPG and Warner Bros. to close off a portfolio of films in August, a move that incurred AUS$45 million ($37 million) in losses, the company said.