The Unique New Way for TV Shows to Get Financed

A version of this story first appeared in the Oct. 10 issue of The Hollywood Reporter magazine.

When Gina Matthews and Grant Scharbo‘s Little Engine Productions pitches the event series Saints & Strangers to networks this fall, it will have more to offer than producing services.

Thanks to deals with Aver Media and Sony Pictures Television, the executive producers behind USA’s Rush now also function as a studio to provide “gap” financing for straight-to-series projects, covering the difference between production costs and the network license fee.

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“Producers are beholden to a traditional way of doing things,” says Scharbo. “We can still do shows in the traditional model, but now we can also offer more flexibility in how things are financed, and the upside is [some] ownership.”

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Little Engine has a first-look production deal and a separate worldwide distribution pact with Sony TV, which is already on board as a partner for Saints & Strangers along with Aver and Mark Burnett‘s One-Three Media. The script is by Chip Johannessen and Walon Green.

Saints & Strangers is based on the little-known true story of the Mayflower and Plymouth colonies. “We have a script, a bible and a sizzle real,” says Scharbo. “We’re taking it to buyers in this new [business] model. It’s a big, epic, limited series about the birth of America.”

“It’s a faith-based crossover as well,” says Matthews. “What people don’t know is that half the people on the Mayflower were escaping religious persecution but the other half were after an adventure or were looking for wealth or escaping mutiny charges.”

Scharbo and Matthews sought out Burnett because of his faith-based hits, including The Bible on History Channel. After they got into business together, Burnett mentioned he had a pilot commitment at TNT. Scharbo pitched an idea he had been writing called The Edge, an action-adventure show set in the world of mountain search and rescue. They are now developing it together for the Turner cable channel.

Aver (a Bank of Montreal division), which was founded and is run by Peter Sussman, former CEO of Alliance Atlantis, has taken a minority stake in the company and will provide additional bridge financing as needed.

Matthews and Scharbo, who are married and hold dual U.S.-Italian citizenship, also lower production costs by shooting in Europe or subsidy-rich Canada.

They will probably shoot Wasteland in Canada or Europe as a “treaty production” so it will be eligible for subsidies. Wasteland is being written by Mick Davis and is jointly produced with Bob Cooper‘s Landscape Entertainment and J.J. Jameson. Sony will handle international sales.

Shadow, in development for ABC, is another partnership with Aver and Sony TV, and is being written by Jayson Rothwell. They are producing with Michael Goldstein and Michael Larkin, whose credits include Behind the Camera: The Story of Charlie’s Angels on NBC. They are currently working on the script.

Little Engine, which was founded in 2007, is also anticipating a renewal for Rush, which has built buzz in its first season on USA Network. It is written and directed by Jonathan Levine, and is a producing partnership with Fox 21.

“The reason this is happening is that there is more opportunity now than ever before for different business models,” says Scharbo. “There are so many outlets and not everyone can afford to license [programs] at studio rates. We see an opportunity to make content that does not necessarily fit the studio model.”

While bringing financing and holding E.U. passports can help lower costs, that doesn’t mean they do things at lower budgets, says Matthews. “Our budgets will be the same,” she explains, “but because we bring in one or two producing partners in the beginning, it allows us the flexibility to structure a deal that is beneficial to everyone.

“Our goal is to lower the risk and increase the gain for all parties,” she continues. “It’s a very risky business.”

Oct. 1, 11:30 a.m. Updated with additional details.