Warner Bros. Closes $450 Million Financing Deal With Dune, Brett Ratner's RatPac (Exclusive)
Warner Bros. has closed a massive financing arrangement with RatPac-Dune Entertainment, a newly formed partnership between by Dune's Steven Mnuchin, filmmaker Brett Ratner and Australian billionaire James Packer, to fund its upcoming movie slate, informed sources tell The Hollywood Reporter.
Sources peg the value of the deal at $450 million, covering Warners and New Line's entire movie slate of up to 75 titles, and would last three or four years. Among the first films covered are the Sandra Bullock starrer Gravity, which opens Friday, and the Christmas Day release Grudge Match.
THR first reported in July that Warners was putting the finishing touches on a deal to replace its longtime financing partner Legendary Entertainment, which signed a deal days later with Universal Pictures.
According to a source, a quiet negotiation took place that resulted in Ratner not having creative input on the films, a move that Ratner fully supported. As part of the deal, the director-producer won't provide notes or be in the editing room on the titles, though his RatPac logo will grace the films.
"We are very pleased to be entering into this relationship with RatPac-Dune Entertainment," Warner Bros. CEO Kevin Tsujihara said. "This agreement gives us increased strength and flexibility in the motion picture division and an even greater ability to manage risk as we continue to produce high-quality filmed entertainment for the global audience. We look forward to working with their team as we move forward in this exciting new partnership with a truly great organization."
Added Mnuchin, "Warner Bros. Pictures has an incredible track record of success with the most valuable franchise properties, the best relationships in the creative community and an extremely talented executive team."
The new RatPac-Dune deal would be different than Warners' arrangement with Legendary, which could cherry-pick the movies it financed. Multiple sources say the arrangement also will cover a portion of Man of Steel, the pricey Superman reboot that opened in June.
Dune Entertainment, the Hollywood offshoot of New York-based Dune Capital, had been with Fox since 2005, backing movies like Avatar and Marley & Me. The deal was re-upped several times and ran through August 2012. Negotiations with Fox for another renewal broke down, and the studio closed a $400 million deal with former Dune partner and veteran financier Chip Seelig through his new company, The Seelig Group, and Chicago-based hedge fund Magnetar Capital.
THR revealed in December that Ratner, whose films include Rush Hour and Tower Heist, had partnered with Packer -- who is the chairman of Crown Ltd., a massive resort and entertainment group Down Under -- to launch a company to invest in independent and studio tentpole films. Packer's father was the late Australian media mogul Kerry Packer.
It's not clear what amount Packer is investing in the RatPac-Dune deal. There are also unnamed silent investors that are kicking in smaller amounts to the overall $450 million financing vehicle.
Bank of America began shopping a new deal for Warners in the spring after it became clear that Legendary CEO Thomas Tull would seek a new arrangement elsewhere. Legendary had been a key partner for Warner Bros., financing a significant chunk of its Batman and Hangover series, among others, as well as 75 percent of Pacific Rim. Legendary also negotiated a stake in Christopher Nolan tentpole Interstellar before severing ties with the studio.