Warner Bros., Legendary End Talks to Renew Pact
Eight years after they joined in a co-financing arrangement, negotiations have broken down, with Legendary continuing talks to move to Universal or Sony.
One of Hollywood’s most successful movie partnerships has come to an end as Legendary Pictures and Warner Bros. have broken off negotiations to renew their production and co-financing arrangement, according to sources.
Legendary has been in talks with Warners about a renewal of their deal, first negotiated in 2005, while also holding discussions with other studios, most notably Universal and Sony, about moving their operations there.
On Monday, both Warner Bros. and Legendary Pictures declined to comment on the status of their negotiations.
In recent months, Legendary founder and CEO Thomas Tull is said to have spoken to other studios before paring down his list to Universal and Sony.
NBCUniversal is seen as especially promising because it not only has movie distribution but also an extensive television operation. Legendary recently hired former Warner TV head Bruce Rosenblum to run its TV operations, signaling that it is planning a major expansion.
Although they have had success with Legendary financing a significant portion of big-budget Warner Bros. movies, including Batman Begins, The Dark Knight, Man of Steel and The Hangover, both companies have different agendas at this point.
Legendary has been increasing the percentage of ownership in such movies as the upcoming Pacific Rim and 300: Rise of an Empire. Legendary was the sole financier of 42 and of the upcoming The Seventh Son. It also funded 75 percent of Pacific Rim and the upcoming Godzilla.
Legendary also has developed a number of its own movie projects, including Warcraft and Hot Wheels – with budgets expected to top $100 million each.
Tull wants to be more involved as a producer and not just be a passive financier, according to sources. He wants to be consulted on everything from the script to the marketing in a much more intense way than he has at Warner Bros.
Meanwhile, Warner Bros., according to sources, is looking to take complete ownership of movies made from its DC comics franchise as it did with the Harry Potter films, rather than splitting the revenue in return for co-financing.
Warners still has a co-financing arrangement with Village Roadshow, which recently was refinanced with more than $1 billion, and reportedly is looking to raise additional capital through an arrangement to be led by Bank of America and Merrill Lynch.
Warner Bros. also wants out of a situation where Legendary has the right to cherry pick which of its movies to finance. Other slate deals at studios typically include investments in a wider range of movies.
Warner Bros. had a right to match any offers Legendary got from other studios but now apparently has walked away from any deal.
The news that Legendary will not renew its pact with Warner Bros. comes on the heels of the departure of Jeff Robinov as head of movie production. Warner Bros.' new chairman, Kevin Tsujihara, reportedly met with Tull, but they were not able to reach an agreement.
Legendary has been preparing for this split for months. It raised $443 million in capital in December and has a $700 million credit facility set up in 2011.