Meet the Texas-Based Moneyman Behind Sony's New Financing Deal
This story first appeared in the May 2 issue of The Hollywood Reporter magazine.
Amid layoffs and cost-cutting, it was no secret Sony Pictures was seeking a financing deal to replace the one with Relativity Media that ended in 2011. But what is surprising is that its new pact, worth $200 million and announced April 9, includes money from Citibank and LStar Capital, the credit financing arm of Lone Star Funds, a Dallas-based firm with no Hollywood experience.
Lone Star, which emerged as a backer after Sony's planned deal with a venture from showbiz lawyer John LaViolette and producer Joseph Singer fell through, is one of Texas' largest private-equity companies and is run by billionaire John Grayken. Considering it has raised a hefty $45.5 billion since its founding in 1995, it has managed to remain largely under the radar, rarely even acknowledging the companies in its portfolios. The firm is known for investing heavily in the U.S. residential mortgage market and buying distressed housing debt during the recent real estate crisis. (Lone Star's most recent investment was the $1.3 billion purchase of DFC Global, a payday loan company that operates under such names as Money Mart and Insta-Cheques.)
Insiders say the Sony deal is a multiyear arrangement that includes equity and debt financing -- though, true to his reputation, Grayken has declined comment.