Hot Financiers Pouring Money Into Hollywood
Investors return to movies as millions flow to producers.
Four years after the financial collapse sent Wall Street fleeing from risky Hollywood, big investors have been making their way back into the movie business. Wealthy individuals, investment banks and private-equity funds now are savvier and more active partners to filmmakers and studios than they were circa 2005, and they're angling for midteen returns.
THR takes a look at five of the most active backers. – Paul Bond
Cross Creek Pictures
Formed in 2009 by Louisiana brothers Timmy, Bobby and Tommy Thompson, who made a fortune in oil and real estate, the company is run by Oliver, formerly of Propaganda Films. He struck a three-year distribution deal with Universal in summer 2011, and the company's plan is to finance about four films a year in the $15 million to $65 million range, with Universal distributing at least two of them. On the heels of 2010's Black Swan, which grossed $329 million worldwide, Cross Creek backed George Clooney's The Ides of March and is behind the upcoming Colin Firth comedy Arthur Newman, Golf Pro. It also is developing a Steve McQueen biopic.
The company was launched in 2008 with $100 million from Cyrte Investments, an $8 billion Dutch investment firm, though some investors will come in for a single picture, like January's The Woman in Black, which grossed $118 million and will pay backers "a many-fold return," says CEO Sinclair. "We're very well-capitalized by Cyrte," adds Sinclair, "but we have a list of about 40 people whom we talk to who like to invest." Exclusive helped bankroll Clooney's The Ides of March and is backing the upcoming So Undercover, starring Miley Cyrus; Jake Gyllenhaal's End of Watch, set for a September release; and Ron Howard's racing movie Rush.
Jean-Luc Fanti, Jeff Sagansky and Eli Baker
Hemisphere Capital Management
Hemisphere controls hundreds of millions of dollars that back big-budget movies at Sony (The Smurfs, Men in Black 3) and Paramount (The Adventures of Tintin, World War Z). The company began as Winchester Capital Management in 2006 and rebranded itself in June with fresh money from Toho-Towa Co. and Kadokawa Shoten of Japan and Lotte Cinema of Korea, along with private-equity investors and financing from J.P. Morgan. Says Baker, "With Wall Street receding from the space … we saw a greater opportunity to supply co-financing capital to studios on a limited basis than previously existed."
Ellison, 29, founded the company in 2006, the year he co-financed and starred in the box-office dud Flyboys. Four years later, he struck a deal to co-finance Paramount movies and raised $350 million from JPMorgan Chase and equity investors, including his father, Larry Ellison, the billionaire founder of Oracle. (Sister Megan has a separate movie company.) Skydance gets a first look at Paramount projects, scoring with its first selection, 2010's True Grit, which grossed $250 million worldwide. Mission: Impossible -- Ghost Protocol followed, and next up are June's G.I. Joe: Retaliation, One Shot with Tom Cruise, World War Z with Brad Pitt and the next Star Trek.
Myles Nestel and Lisa Wilson
Launched in January by film financier Nestel (Machete, Machine Gun Preacher) and Wilson, who has spent four decades in international sales (most recently at GK Films), the newcomer boasts $50 million in private equity and is finalizing Wall Street funding of up to $100 million. "There's a lot of capital coming into the market," says Nestel. "Some high-net-worth individuals who made money in some other film deals are coming back." The duo is looking to finance 10 pictures a year in the $5 million to $45 million range and handle international sales. Among its first is Cities, starring Kirsten Dunst and Orlando Bloom.