Take Note, Hollywood: The New Movie Money Is Here
This story first appeared in the May 16 issue of The Hollywood Reporter magazine.
Almost 75 years ago, Howard Hughes spent nearly $4 million of his own money to make Hell's Angels, upsetting the studio ecosystem. The dusty path he forged has since become a highway for high-net-worth individuals seeking a foothold in Hollywood. Today's rising stars include Molly Smith, whose Black Label Media partially is funded by her father, FedEx founder Fred Smith; Teddy Schwarzman, who scored a $7 million deal in February from Harvey Weinstein for the Benedict Cumberbatch starrer The Imitation Game; and Australian James Packer, who now runs RatPac Entertainment with Brett Ratner. They're joining indie players such as Megan Ellison, daughter of Oracle founder Larry Ellison; and Worldview Entertainment, backed in part by stockbrokerage heiress Sarah Johnson Redlich, in financing and producing prestige projects that studios are afraid to make or to fully finance.
Among producers and indie agents, these folks are superheroes. Says New Regency chief Brad Weston, who is working with Packer and Worldview: "They are infusing money into the system and giving us the ability to make more movies. It provides a full set of choices."
For high-net-worth individuals, says film finance lawyer Jordan Lichtman, a partner at Manatt, Phelps & Phillips, movies are "an asset class they can understand because of the mechanics, yet there is a lot that is unique, such as ancillary revenues" like merchandising. But sometimes working with the very rich gets messy. Remington Chase and Stepan Martirosyan, the financiers of Lone Survivor who are backed by Russian oil money, became radioactive earlier this year when an LA Weekly story detailed cocaine trafficking convictions, prison time and stints as federal informants.
And the plans of Brunei's Prince Azim to become a major player (he recently financed and produced indie drama You're Not You, starring Hilary Swank and Emmy Rossum, as well as put money into Dark Places, Charlize Theron's upcoming film) could be complicated by the outcry over the May 1 implementation of Sharia law -- which dictates the stoning to death of gays -- in his country by his father, Sultan of Brunei Hassanal Bolkiah.
Jumping into film financing can cause small-scale drama, too. Says Arcadiy Golubovich, who is financing Tom Hanks' A Hologram for the King: "It was a bit of a scandal when my family found out I wanted to study theater and film in college, but they grew to support me."
Even for the very rich, Hollywood's wild swings can be uncomfortable -- billionaire Steven Rayles has pared back his film company, Indian Paintbrush, although he's expected to continue financing Wes Anderson's films -- but that isn't dissuading a new generation from setting its sights on Tinseltown.
Teddy Schwarzman, Black Bear Pictures
Money Source: He's the son of Stephen A. Schwarzman, chairman and CEO of investment banking firm Blackstone who boasts a net worth of at least $10 billion.
Film-Biz Cred: Schwarzman, 34, worked as a PA on Natalie Portman's 2009 film The Other Woman before taking a job at John Sloss' company Cinetic Media, where he arranged financing for indie titles. While earning his stripes, Schwarzman, who lives in New York, kept his Wall Street roots secret.
Buzz: Schwarzman's 3-year-old boutique business is hitting its stride: He won a heated battle to finance and produce The Imitation Game after Warner Bros. put the project, which stars Cumberbatch as World War II cryptographer Alan Turing, into turnaround. Schwarzman dazzled buyers in February with a reel, sparking a bidding war that resulted in a $7 million deal with Weinstein for U.S. rights. Black Bear also is financing and producing Gold, based on a real-life Indonesian mining scandal, and has come aboard to pay for 70 percent of Eli Roth's $5 million Knock Knock, starring Keanu Reeves. Little-known fact: Black Bear helped save Russell Crowe and Mark Wahlberg's Broken City from being discarded. And Schwarzman was the major financier of J.C. Chandor's All Is Lost. As for expansion, Black Bear is now the owner of Elevation Pictures, the No. 2 independent distributor in Canada after eOne.
Molly Smith, Black Label Media
Money Source: Black Label, which Smith runs with actor Thad Luckinbill and his twin brother, finance lawyer Trent, is backed with help from her FedEx founder father, Fred (the multibillionaire financier of Alcon Entertainment, currently smarting over box-office bomb Transcendence) and a private equity fund.
Film-Biz Cred: Savvy and well-connected, the 33-year-old Molly -- one of 10 children -- started working at Alcon at 19 in physical production, a job she held for five years before forming 2S Films with Hilary Swank.
Buzz: "We don't intend to be passive," says Smith, and in fact in just over a year, her L.A.-based company has become one of the most active financing-production ventures in Hollywood for indie prestige fare. Black Label's mission is to make three to four films a year budgeted between $3 million and $35 million. First up is Sudanese refugee drama The Good Lie, starring Reese Witherspoon (partnering with Imagine, Black Label picked up the languishing project from Paramount). Smith and the Luckinbills will head to New Mexico, where Denis Villeneuve, who directed Prisoners for Alcon, begins shooting the $30 million Sicario, starring Benicio del Toro and Emily Blunt and set to be shopped at Cannes. And Black Label is backing Dallas Buyers Club director Jean-Marc Vallee's Demolition, as well as Salinger's War, which marks the directorial debut of screenwriter-actor Danny Strong (Lee Daniels' The Butler). The trio also is intent on acquiring titles to build a directors stable, and partnered with Roadside Attractions to scoop up U.S. rights to '71, the well-reviewed debut from filmmaker Yann Demange.
James Packer, Ratpac Entertainment
Money Source: Packer, 46, son of late media mogul Kerry Packer, is Australia's third-richest person with a reported worth of $6 billion. He's also chairman of the Crown Resort conglomerate.
Film-Biz Cred: Packer, who lives in Sydney suburb Bondi Beach, may have virtually none, but he shrewdly teamed up with Brett Ratner, a veteran with instant access to the major studios.
Buzz: Last year, Packer and Ratner's RatPac Entertainment, in partnership with Dune Entertainment, struck a lucrative, multiyear slate financing deal with Warner Bros. that's valued at $450 million (Gravity was the first film financed under the deal), becoming instant studio darlings who will soon move into Frank Sinatra's old offices on the studio's lot. RatPac also has a deal with New Regency and Brad Pitt's Plan B and is helping to back a diverse slate of projects, including two New Regency titles: Alejandro Gonzalez Inarritu's The Revenant, starring Leonardo DiCaprio, and David Michod's The Operators, a potential vehicle for Pitt.
Arcadiy Golubovich, Primeridian Entertainment
Money Source: Golubovich is the son of Russian oil billionaire Alexei Golubovich and grocery mogul Olga Mirimskaya. His parents made headlines with a messy divorce battle last year over their $10 million London home.
Film-Biz Cred: Golubovich, 26, began his career as an actor before teaming with former studio executive and indie finance agent Tim O'Hair.
Buzz: The year-old Primeridian's first film is Tom Tykwer's A Hologram for the King, starring Tom Hanks and based on the novel by Dave Eggers. The $35 million-plus comedic drama is headed to the Cannes market. Golubovich and O'Hair's company has ambitious plans and is developing a dozen projects, including a feature based on the life of Soviet dissident Alexander Solzhenitsyn.
David Boies, Boies/Schiller Film Group
Money Source: Lawyer Boies represented Al Gore in the contested 2000 presidential race, and his legal practice has made him a multimillionaire.
Film-Biz Cred: Boies, 73, is just getting into the movie business. Partner Zack Schiller, the son of Boies' law partner, Jonathan Schiller, has been working in the industry for more than a decade, having spent his early years as an assistant.
Buzz: After forming the outfit in 2012, Boies and Schiller rescued Portman's troubled Western Jane Got a Gun, by fully financing the $25 million film when it nearly was shut down during production (one source says Boies, who loves Westerns, was negotiating the terms for Gun on the very day he was preparing for his U.S. Supreme Court fight to overturn Proposition 8, California's anti-gay marriage initiative). Boies/Schiller is funded by a private equity group in which Boies is a participant. Otherwise, Boies, who lives in Westchester County, N.Y., has kept a decidedly low profile regarding his foray into film financing. His daughter, Mary Regency, also has done some producing. Boies/Schiller Films is developing star-driven, sci-fi action films or high-concept R-rated comedies.
Christos V. Konstantakopoulos, Faliro House Productions
Money Source: He's the son of the late Vassilis C. Konstantakopoulos, a Greek captain turned billionaire entrepreneur who founded Costamare Shipping.
Film-Biz Cred: The shipping heir, who calls Athens home, quietly has been helping to finance smaller U.S. indie titles for more than five years while also bolstering Greece's film industry.
Buzz: Founded in 2008, Faliro has been involved with a wide array of smaller indie titles, including Jeff Nichols' Take Shelter, Jim Jarmusch's Only Lovers Left Alive, Terrence Malick's Knight of Cups, Richard Linklater's Before Midnight and Alex Ross Perry's critically acclaimed 2014 Sundance Film Festival entry, Listen Up Philip. Faliro is partnering with France's Haut et Court and the Netherlands' Lemming Films on The Lobster, the English-language debut from Oscar-nominated Greek director Yorgos Lanthimos, starring Colin Farrell and Rachel Weisz. The low-key Konstantakopoulos doesn't make the rounds in Hollywood much, but is nonetheless carving out a niche.