Indie Movie Studio Launches with $300 Mil. Financing
A self-styled independent movie studio is announcing its launch Monday by putting together the two things that independent films lack most: distribution and financing.
DF Indie Studios, headed by two New York corporate restructuring experts, is starting with about $300 million in loans and distribution deals, and is about halfway to raising $100 million in equity, its founders say.
The founders, Mary Dickinson and Charlene Fisher, plan to make and distribute 10 to 12 films a year that cost $10 million or less to produce. They expect to guarantee those movies theatrical release in the U.S., but only after putting them through the profit-focused “greenlighting” approval process generally seen in major studios.
Other studios have a similar strategy, but generally not for movies with budgets this small.
The market for low-budget, independent movies at film festivals has crumbled in the past two years, and indie labels at the major studios have been shuttered or merged. Larger studios that distribute movies had bid up the price for independent films even though many did not pay off, and the studios pulled back from the market when the economy turned bad and financing became harder to come by.
Dickinson, 51, and Fisher, 42, say they did not know the indie environment would look like this when they began working on the project two years ago.
“This was not nearly as brilliant as the market has made us,” said Dickinson, the chief executive. “It’s created a huge vacuum in the marketplace.”
DF Indie has a $150 million revolving credit line with a major bank to pay for film printing and advertising, and $150 million in deals with domestic and foreign distributors who have seen a proposed slate of films.
In addition, wealthy individuals have invested between $5 million and $20 million each for part ownership of the company and a share in the films’ proceeds.
The movie projects are being produced by people with strong Hollywood track records, including Ridley Scott and Tony Scott, whose company produced “Gladiator,” and Jennifer Fox, the producer of “Michael Clayton.”
A small theater chain has guaranteed even the smallest of the new studio’s films will be able to debut in up to 50 U.S. locations, while larger chains have also been receptive, said Fisher, the company’s president.
That’s a major step up from the industry practice in which independent producers cobble together the money to make movies, only to be entirely reliant upon a major studio distribution deal, often cut at film festivals, to have any chance of recovering their costs.
DF Indie’s healthy budget for printing and advertising, known as P&A, is designed to ensure that runaway hits can expand distribution quickly, much like last year’s “Slumdog Millionaire,” which began at 10 U.S. locations but ballooned to nearly 3,000 after it dominated the Oscars in February.
“That’s why we need a P&A the size we do,” Fisher said. “You can’t go and raise the money. You have to have it readily available.”
6/15/2009 12:00 AM RYAN NAKASHIMA AP Business Writer LOS ANGELES