EXCLUSIVE: Crystal Sky Group, Anchor Bay Sign Co-Production Deal

Crystal Sky Group has closed a deal with Anchor Bay Films to jointly produce, finance and acquire up to 15 films annually with budgets from $2 million to $30 million for at least two years.

Owner and CEO Steven Paul said Crystal Sky has created a subsidiary, Crystal Edge, to produce the movies and provide finishing funds for other movies.

Jon Voight will star in one of the first Crystal Edge movies, Beyond, a supernatural thriller being directed in Alaska by director Joseph Rusnak (The 13th Floor) on a $10 million budget.

Jason Price, a former head of legal at Crystal Sky who left to produce movies, has returned as Crystal Edge's head of production and acquisitions. A movie Price produced, American Virgin, starring Rob Schneider, will premiere on Comedy Central this year.

Crystal Edge also made its first acquisition, the Chinese-language film Flower, taking North American rights for the romantic drama with overtones of ethnic strife set in Kazakhstan. According to Zhang Huixia, manager of Huaxia Film Distribution, the deal was closed Thursday by the Beijing-based movie production and sales company.

At AFM with a portfolio of movies to sell, Huaxia has experienced rapid growth in line with the multiplex building boom in China. Huaxia had sales last year of about $228 million, up 76% from 2008, while grabbing a 26% share of the Chinese box office.

Other movies already in the works that also will fall under the Crystal Edge banner include the recently announced Losing My Virginity: The Richard Branson Story. It is being written by David Mirkin (Heartbreakers, The Simpsons), who also directs.

The second sequel to Crystal Sky's live action-animation movie series Baby Geniuses, subtitled Diaper Detectives, will also fall under the Crystal Edge umbrella. Anchor Bay will handle domestic distribution, making it the first of the three Baby Geniuses movies not distributed by Sony. It's written by Greg Poppen, who wrote the other sequel, Super Babies.

Under the new joint venture, Anchor Bay, a division of Starz Media, gets all English-speaking territories for theatrical, video and ancillary. Anchor Bay and Crystal Sky will share in the making, marketing and selling the movies in various combinations.

"This deal will afford us distribution in the United States, Canada, U.K. and Australia on all distribution platforms," Paul said, "with one of the best marketing teams in the business."

This is a shift by Crystal Sky to lower budgets; in recent years, such movies as Tekken and Ghost Writer 2 had budgets of $25 million or more.

Paul said he is making this move because he sees "a void in the market," with studios focused on bigger-budget tent poles. He said he has lined up bank financing to support the deal.

Anchor Bay, one of the largest non-studio affiliated home video and ancillary market distributors, has been has been heating up its domestic theatrical activity since the demise of sister company Overture Films. Most Crystal Edge movies also will have a pay TV window on the Starz channels.

"Our distribution venues offer them and their upcoming properties a home in which to get their films out to the fans via numerous platforms," Anchor Bay Films president Bill Clark said.

Upcoming Crystal Sky productions include Ghost in the Shell, with producer Steven Spielberg and DreamWorks, and Maximum Ride for Universal Pictures. Crystal Sky's related entities focus on branded entertainment including video games, books, Manga comic books, graphic novels and toys.

The deal was negotiated by Bill Clark, Kevin Kasha and Richard Turner for Anchor Bay Entertainment and by Paul and attorney-producer Scott Karol for Crystal Sky.