New Element: rich P&A deal
Inks $220 mil Merrill Lynch facilityElement Films has finalized a deal with New York-based Merrill Lynch to secure a revolving loan facility providing Element with as much as $220 million of capacity to finance the prints and advertising budgets of its movies. The money will be used to for the company's slate of a minimum of 10 motion picture releases during the next three years.
The deal may make Element the only independent company to have a credit for P&A of that size; more important, it gives the company the opportunity to have 100% control of the moviemaking and distribution process.
Element self-finances its motion picture projects, maintains a multipicture distribution arrangement with Lionsgate and controls the international distribution of its product through its in-house foreign sales division, Element Films International.
One of the areas the P&A loan facility will go to is the Lionsgate deal, which calls for Element to develop, self-finance and produce three motion pictures a year for wide release by Lionsgate. The loan will enable Element to fully finance the marketing campaigns that will be integral to the success of these wide releases.
"Of the indies out there, we truly serve as a quasi-studio," Element Film president Adam Rosenfelt said. "We now have the means to control and shape from development through distribution. It's a nice competitive advantage."
The new P&A facility will cover Element's upcoming motion pictures, including the Kevin Costner-starrer "Mr. Brooks," to be released by MGM in 2007. Lionsgate releases include "Pride," a sports drama starring Terrence Howard and Bernie Mac; "College," a youth comedy set on campus; and "Killers," a horror story that begins filming Nov. 13 and stars Agnes Bruckner, Taryn Manning and Patrick Flueger.