Revolution Studios Sale Closes at $230 Million
The sale of Joe Roth’s Revolution Studios to Fortress Investments closed Thursday at a price of $230 million, according to sources.
Fortress is a New York-based public company that operates hedge funds and bond funds, and manages more than $62 billion.
Of the $230 million paid for the 46 movies, two TV series and other assets of Revolution, $130 million was borrowed by Fortress from a group of banks led by Sun Trust. Other banks involved included One West Bank, Union Bank, East West Bank and City National Bank.
The new Revolution also got a $25 million revolving line of credit that has not been tapped yet.
As part of the sale, Fortress paid off Revolution's existing bank debt of about $175 million.
Revolution was started by Roth in 2000 with great promise and major investments by Sony Pictures, Starz and Fox television, all of which got distribution rights as well as a minority equity interest in the company. It stopped making movies in 2007.
Roth has the largest share of the equity, which was 62 percent initially. Other former employees in line for payouts include Rob Moore, Todd Garner and the estate of the late Tom Sherak. Sony, Starz and Fox will also be paid off for their equity in Revolution.
Three current Revolution executives will now take a lead role. They are COO Vince Totino, senior vp Scott Hemming and general counsel Marla Levine.
Revolution will now operate as a sales company to exploit the rights of the movie library as the films revert to the company beginning in 2016 when distribution contracts expire. It will also have an active TV division, which will tap into remakes from the library as well as original shows.
Roth's consulting arrangement with Revolution going forward is primarily to have him involved in TV, although he will also act as a strategic advisor to the company.