New Regency Closes Deal for $500 Million in New Financing
11:17 AM PDT 9/10/2011 by Alex Ben Block
The credit line will allow for increased film production.
New Regency has completed a deal to replace its $500 million credit line through a group of banks, setting the stage for a more active role for founder Arnon Milchan and providing funding for more movies under his new president and CEO Brad Weston.
The lead banks on the five-year revolving credit line are J.P. Morgan and Bank of America, with at least another dozen banks involved in the syndication of the loan. The deal is done but it will take another week or two before all the contracts are completed and signed, after which the deal will be formally announced, according to sources.
New Regency has a very strong credit rating, a proven track record and a library of films, so it apparently negotiated a very good rate of interest on the loan package. This replaces an existing line which is expiring next year.
Milchan and Weston did not return calls seeking comment. News of the impending deal had leaked in early August but the bank syndication was only completed this week.
The influx of cash is expected to be used by New Regency to finance more of its own movies than in the past and make a push to once again be a force in domestic television production. Although it produced the Fox series Malcolm In The Middle, New Regency has not been very active in TV in the past couple years. The New Regency TV division is a joint venture with Fox TV Studios.
Although New Regency is still 20% owned by News Corp. and renewed its movie distribution deal with 20th Century Fox this past January through 2022, the plan is to actively develop, finance and own more of the movies it makes. Fox will still have first pick on those movies, but New Regency is expected to continue to work with other studios as well.
In the past New Regency financed about three-quarters of its movies and Fox the rest. Now New Regency is expected to back even more of its own productions. The studio has several dozen projects currently in development.
New Regency’s next release will be What's Your Number, a comedy starring Anna Faris and Chris Evans, which Fox will open on September 30.
In October, Fox will release the sci fi thriller In Time, starring Olivia Wilde, Justin Timberlake and Amanda Seyfried.
Fox will also go wide at Christmas with the sequel Alvin and the Chipmunks: Chipwrecked, the latest in a series of films based on the animated characters.
Those films were all created under the regime of Robert Harper and Hutch Parker, who had joined New Regency from executive positions at Fox in 2008. They recently announced they would be leaving the studio. Milchan is believed to be taking a more active role in the wake of their departure.
In the past year, New Regency has not had many break out hits. Its releases include Big Mommas House: Like Father, Like Son, which opened in February and grossed just over $83 million worldwide. Monte Carlo, starring Selena Gomez, was released through Fox 2000 in July and grossed about $33 million worldwide. It’s 2010 releases also included the disappointments Love and Other Drugs, with Anne Hathaway and Knight and Day, with Tom Cruise. which cost over $115 million to make and grossed about $261 million worldwide.
Milchan first founded New Regency in 1981. After being based at Warner Bros. he moved his operations to Fox in 1999, where it has been ever since. A native of Israel, Milchan's company owns interests in an Israeli TV network and other companies.
Milchan is the subject of a book released in July, Confidential: The Life of Secret Agent Turned Hollywood Tycoon Arnon Milchan, by Joseph Gelman and Meir Doron. The book goes into Milchan’s past when he was in the Israeli military, worked for the Israeli secret service and was involved in securing weapons. Milchan left that life behind years ago.