UDPATE, 2 AM WRITETHRU: With the British film and TV industry in the throes of a capacity crisis, it’s a good — if frustrating — time to be in the studio facilities business. The Pinewood Shepperton group today announced consolidated results for the six months ended September 30th with £36.6M ($59.1M) in revenues compared to £27.1M ($43.8M) in the same period last year. After-tax profit was $5.5M, up from $3.2M in 2012. The Pinewood studio is currently host to Kenneth Branagh’s lavish Cinderella, Hammer sequel The Woman In Black: Angel Of Death, and just had Ridley Scott’s Exodus on the lot which has now gone on location. Lucasfilm has also hung its shingle with the new Star Wars installment gearing up to shoot in 2014. Johnny Depp-starrer Alice In Wonderland 2 is expected to turn up, and Bond will be back with No. 24 next year. Over at nearby Shepperton, Marvel has wrapped Into The Woods and has The Avengers 2 on deck. But I hear its Ant Man had to forgo shooting in the UK due to the lack of space.
The joint-venture set up in April between Bruno Wu‘s Seven Stars Media and the UK’s Pinewood Studios is known as Song Lin, Chinese for Pinewood. Malcolm Wall has just been appointed to lead the 50-50 arrangement that’s intended to finance and produce content in China for the global market. Wall will establish a project team and oversee the launch of the business. The partners are each initially putting up $1M for R&D on local business proposals which include co-production opportunities; training courses to be given by British institutions in Beijing and other cities; financing and related services for local productions; film-themed entertainment venues in Shanghai and regionally; and film-themed projects in Beijing, Shanghai and Wuhan. Wall is a former Virgin Media content executive who was most recently CEO and advisor to the board of Abu Dhabi Media. He will be based in China.
Pinewood Shepperton has had its share of good and bad news of late. The home of the James Bond franchise is reporting a significant increase in operating profit for the fiscal year, has a steady stream of productions on its stages and is growing abroad. But, it’s still facing a stubborn local council that’s twice rejected its UK expansion plans, most recently in May. A public inquiry into the matter begins November 19. CEO Ivan Dunleavy notes, “Our customers are concerned that the company has sufficient capacity to meet their needs… The need for further, effective infrastructure to meet demand for the UK is a priority.”
Revenue for the 2012/2013 fiscal year ended March 31 was £63M ($96.3M) with operating profit of $8.25M versus $4.13M in the previous period. Among recent films to shoot at Pinewood are The Muppets… Again! and Maleficient. Upcoming are Kenneth Branagh’s Cinderella, Marvel’s Guardians Of The Galaxy and Star Wars: Episode VII.
We already knew that, like its six predecessors, Star Wars: Episode VII was going to shoot in the UK where expectations were that it would end up at Pinewood Studios. Now we know for sure. Pinewood isn’t talking publicly about the news that was first reported by Screen, but a source close to the production tells me the movie will indeed set up camp at the iconic facility that’s also home to James Bond. Director J.J. Abrams recently said production would start at the beginning of 2014 and that “Most likely we are going to be moving to London at the end of the year” for the film. Pinewood currently has Kenneth Branagh’s Cinderella in residence along with Marvel’s Guardians Of The Galaxy. Along with those two films, Star Wars will mark the latest in recent collaborations between Disney and Pinewood. Angelina Jolie-starrer Maleficent shot there earlier this year. But it’s not all Disney business. Fox’s Exodus, the biblical epic from Ridley Scott, will also shoot at Pinewood later this year. With all those movies in residence, will there be enough room? I’m assured that even with a massive project like Star Wars moving in, Pinewood will be able to have two or three other films at the same time.
This is a surprising result given it’s the second time the UK’s venerable Pinewood has had an expansion project thwarted – and despite the increased interest of major U.S. studios to shoot there. The studio, which is home to the 007 set built in honor of the James Bond films that have been filmed there and which houses many major Hollywood pictures, first applied for permission to expand back in 2009 and was refused in early 2012 because it was eyeing protected land. The studio owns the land, but failed to satisfy the Buckinghamshire Council’s requirement of “special circumstances” to proceed. Today, the council refused a more recent modified application for an increase in capacity. Earlier this week it was reported that Hollywood studios, including Disney, Marvel, 20th Century Fox and Universal, had written to the decision makers urging approval.
Pinewood Shepperton is continuing an aggressive expansion drive with its new Pinewood Atlanta joint venture. The studios are partnering with River’s Rock LLC, an independently managed trust, to develop 288 acres of land south of Atlanta into world class studio facilities. Pinewood has a 40% share in the venture which is being funded by River’s Rock and a debt facility from Synovus Bank. Georgia’s tax incentives can reach up to 30%: there’s a 20% credit for qualified productions, which are then eligible for an additional 10% credit if they include a Georgia promotional logo within the finished product.
Fayette County Development Authority president Matt Forshee recently told the Atlanta Business Chronicle that the new studio would provide the infrastructure required to attract large-scale Hollywood productions. Georgia has been the backdrop for a number of film and TV shoots that require natural scenery, but it’s had a harder time with productions that need big studio space. Construction on the facility will start immediately.
Global Showbiz Briefs: K5 & ‘Cutie’, ‘Khumba’, Monte Carlo TV Fest, RealD In Rio, ‘Shield Of Straw’, NBCU International, Pinewood Indomina, ITV & More
K5 In The Ring With ‘Cutie And The Boxer’
K5 International has boarded director Zachary Heinzerling’s Cutie And The Boxer which is screening this week in Tribeca. Heinzerling won the U.S. Documentary directing prize in Sundance for the film which is his feature debut. The movie is a New York love story about life and art that explores the chaotic 40-year marriage of renowned boxing painter Ushio Shinohara and his wife and artist Noriko. It will be released Stateside by Radius-TWC in August. King Records will distribute in Japan with Parco and Madman in Australia.
Steve Buscemi, Anika Noni Rose Join ‘Khumba’
South Africa’s Triggerfish Animation Studios has added the voice talent of Steve Buscemi and The Good Wife’s Anika Noni Rose to its 3D animated feature, Khumba. They join Liam Neeson, Laurence Fishburne, AnnaSophia Robb, Jake T. Austin, Loretta Devine and Richard E. Grant. Khumba tells the story of a half-striped Zebra who is blamed for a severe drought by his herd. He teams up with a sassy wildebeest and a self-obsessed ostrich to go in search of the magic waterhole where legend has it the first zebras got their stripes and meets an array of wacky characters on the adventure. Edward Noeltner’s Cinema Management Group has international sales. Millennium Entertainment will release in the U.S. later this year. Buscemi and Rose’s deals were brokered by WME and Ned Lott on behalf of Triggerfish Animation. Buscemi is also repped by The Gotham Group.
The UK’s Pinewood Shepperton is the latest Western outfit to hook up with Chinese media mogul Bruno Wu via a joint-venture to finance and produce content in China for the global market. The 50/50 partnership with Wu’s Seven Stars Media Limited will be called Song Lin (Pinewood in Chinese) with each side initially putting up $1M for R&D on local business proposals. Those include co-production opportunities; training courses to be given by British institutions in Beijing and other cities; financing and related services for local productions; film-themed entertainment venues in Shanghai and regionally; and film-themed projects in Beijing, Shanghai and Wuhan. A UK chairman will be appointed.
This is the most recent announcement involving Wu in what’s been a busy 14 months. In February 2012, he burst onto Hollywood’s radar with plans for an $800M media and investment fund and subsequently formed a joint-venture with Fast Five helmer Justin Lin for a slate of films. He also outlined plans to build entertainment and media hub Chinawood in Tianjin with an investment of over $1.27B. Wu was then in Cannes to say he would back the John H. Lee remake of John Woo’s The Killer and in December hooked up with Avi Arad’s Arad Productions to develop superhero franchise properties inspired by Chinese history and mythology, starting with Rise Of The Terracotta Warriors. Those films along with Gong Li-starrer The Last Empress are in development.
Some industry insiders both in China and in Hollywood have been skeptical of Wu and his ambitious announcements, which so far don’t appear to have produced much tangible output. However, he is understood to be “incredibly well-connected politically” which foreigners believe cannot hurt in a territory like China, where the government retains a tight grip on the media.
A year after its Project Pinewood development was rejected by the Secretary of State for Communities and Local Government, Pinewood Studios has submitted a new planning application for an expansion project valued at £200M ($317M). The Pinewood Studios Development Framework proposal is expected to be spread over 15 years and would essentially double the studio in size with 100,000 square meters of new studios, stages, workshops and production offices along with new streetscapes for external filming and other improvements. Pinewood’s Mark Hamilton tells me, “The UK has capacity issues and everyone is having difficulty fitting in everything that wants to come here… We don’t want to be in a position where we’re turning business away.” Hamilton says a team from Pinewood met and with physical production folk at the U.S. majors to discuss their needs which helped to inform the new proposal. In the past year, Pinewood has played host to such films as Les Misérables, Skyfall, Disney’s Maleficent and Paramount’s Jack Ryan, which just wrapped.
Studios operator Pinewood Shepperton’s unaudited six month results for the year ended September 30 show a marked improvement over the last comparable period. Before-tax profits are at £3M largely reversing a £5.4M loss in 2011. Revenues were £27.1M, up from £24.6M and operating profit jumped from £3.7M to £6.1M. Specifically, revenues from film were £18.8M, up from £16.4M. During the period, the UK facilities hosted Disney’s Maleficent; Marvel’s Thor: The Dark World; Working Title and Universal’s Les Misérables; Paramount’s latest Jack Ryan pic, Maryland; Universal’s Fast And Furious 6, Marv Films/Kick Ass 2 Productions’ Kick Ass 2 and Eon, MGM and Sony’s Skyfall. Pinewood Shepperton CEO Ivan Dunleavy said “The number of film productions contracted so far for next year is encouraging and the Board looks forward to the future with confidence.” TV revenues, however, were down to £2.5M from £3.6M in the earlier period. That was due to the increased film activity that saw those productions spill over to the TV studios.
Pinewood Sheppperton has entered an agreement with the Isle of Man Treasury to source projects and advise on film investment opportunities for a £25M ($40M) fund established by the Irish Sea island. The initial deal term is five years. Along with taking a management fee, the studio facilities operator will recoup a portion of revenues generated by the sale of UK distribution rights to films in which the fund invests. In turn, the Treasury will buy just under 5M shares in Pinewood for £12.2M ($19.7M). The Treasury expects to offer equity finance, UK distribution and gap financing with no fixed caps.
The new deal gives Pinewood a larger footprint in film financing. In 2011, the company said it would invest up to a 20% stake in about four indie films per year. Its most recent project is Belle with Gugu Mbatha Raw, Matthew Goode, Tom Felton, Tom Wilkinson and Miranda Richardson which started shooting on Sept 24.
Joe Utichi contributes to Deadline’s UK coverage:
Pinewood unveiled cutting-edge upgrades to its TV One and Two stages today as it reiterated a commitment to investing in and expanding its facilities. The studio, recently home to features Skyfall, Les Miserables and Maleficent, is keen on TV as a proposed 25% tax break on high-end television production is expected to go into effect in April. The incentive could inject about $570M into the industry. Pinewood corporate affairs director Andrew Smith tells Deadline, “The demand for content is clearly growing globally, and we’re investing in both infrastructure and facilities to respond.” Part of the response is to submit a new application to double the size of the studio.
Seven Group Still Undecided On News Corp.’ $2B Offer For Consolidated Media
In June, News Corp. launched a $2.1B bid for Consolidated Media Holdings, a 25% owner of pay-TV platform Foxtel and 50% owner of the Fox Sports channels, but Seven Group Holdings still hasn’t decided whether to sell its 25.3% stake in CMH. During an earnings report today, Seven Group chief executive Peter Gammell said News has yet to make a formal proposal and there would be no response until then. Gammell said the Seven Group’s request to the Australian Competition & Consumer Commission to review whether it could buy the balance of the shares in CMH did not mean the company would make a counter-offer, only that it wanted to know whether such a transaction would be approved. The ACCC will announce its decision on September 13. James Packer, who owns 50% of CMH, has said he will accept News’ bid in the absence of a higher offer. Seven Group reported today its net profit for fiscal 2012 more than doubled to $165.9M on revenues of $4.46B. But it wrote down by $483.5M the value of its investment in Seven West Media which owns the Seven Network, Pacific Magazines and West Australian Newspapers. The group also announced Ryan Stokes, son of the company’s chairman Kerry Stokes, has been appointed COO. – Don Groves
EXCLUSIVE: The Pinewood Studios Group is bulking up its Los Angeles office with the hire of Andy Weltman, who has been named EVP of Pinewood USA. Weltman was EVP of U.S. Production for the British Film Commission in LA and will now manage the UK studio’s U.S. clients as well as coordinate its international sales. His experience includes working with filmmakers such as Peter Weir, Wolfgang Petersen and Steven Spielberg on films ranging from The Witches Of Eastwick and Who Framed Roger Rabbit to Dead Poets Society, Green Card, The Perfect Storm and Master And Commander. Weltman also worked at the UK Film Council. Over the past few years, Pinewood has rolled out its brand in Toronto, Berlin, Malaysia and the Dominican Republic and is continuing to expand. Big-ticket pictures currently shooting at Pinewood’s flagship studio outside London are the 23rd James Bond movie Skyfall and Tom Hooper’s Les Miserables with Hugh Jackman. “We have worked with Andy closely over the last few years and his knowledge of the industry and his relationships with key clients both in the U.S. and UK will serve Pinewood and our customers well,” Pinewood’s commercial director Nick Smith says. “This is an exciting new hire and one we hope will deliver even stronger results.”
Pinewood Shepperton Studios’ £200 million Project Pinewood development hit a roadblock today when its planning permission was rejected by the Secretary of State for Communities and Local Government, effectively kiboshing the project. Back in 2009, Pinewood submitted an application to develop what would have been a purpose-built living and working community for the creative industries – including 16 permanent streetscapes for external filming. The streetscapes would have represented such cities as Paris, Venice, Amsterdam, Prague, San Francisco and New Orleans giving British filmmakers on a tight budget the opportunity to shoot locally while also enhancing Pinewood’s international offer. Further, Project Pinewood envisioned building 1400 homes, including affordable housing, that would have been open to all comers and provided special discounted rates for staff. Technical and craft training facilities were also on deck. In a bugaboo somewhat reminiscent of the DreamWorks/Playa Vista debacle, however, the acreage Pinewood is eyeing is in a “greenbelt” of protected land. Pinewood owns the land, but had to prove “special circumstances” in order to go ahead with the building. Complicating matters,
Mohammed Fayed, the controversial ex-owner of Harrods department store in London, has emerged as a surprise contender to buy Britain’s premier movie studio Pinewood Shepperton, best known as the production base for the James Bond franchise. Fayed says that he is considering making an all-cash offer for the studio group. He sold Harrods last year for £1.5 billion ($2.5 billion). “It’s very early stages,” Fayed’s spokesman tells me. According to reports, Fayed thinks the James Bond studio needs investment to return it to its glory days. Ridley Scott is currently shooting Prometheus there until mid-July, and sets are being built for Dark Shadows starting May. Fayed’s bid would throw a spanner in the works for lead Pinewood shareholder Peel Holdings, which has just made a bid worth £88 million for the studio. Peel would have to increase its offer if it is to prevail over Fayed, say analysts. The market certainly likes what it’s hearing: Pinewood Shepperton’s shares were up 11% this morning to 224p per share. This is not the first time Fayed has gotten involved in the movie business. Back in the early 80s, he was an early investor in Chariots of Fire. His son, Dodi, also spent time in Los Angeles as a producer.
Peel Holdings is a property investor, and it wants to get Pinewood Shepperton’s sprawling 150-acre grounds and backlot working harder. Around 300 indie film companies are currently based at the 3 sites of Pinewood, …
First half operating profits after exceptional items have also fallen 3% to £3.2 million. Total revenue fell 6.4% in the first 6 months to £19 million. Film production revenue fell by 8.5% to £10.8 million, while TV shooting income fell 7.3% to £5.1 million. Martin Scorsese’s Hugo Cabret was the biggest production to use Pinewood Shepperton between January and June. Other productions using the studios included Disney’s John Carter of Mars and Ruby Films’ Jane Eyre. Pinewood Shepperton has been hit by several Hollywood productions being delayed.
Crystal Amber, which yesterday became Pinewood Shepperton’s biggest shareholder, characterises chairman Michael Grade as “clueless” and called on him to stand down. The investor complains that Pinewood’s revenues have fallen, costs have risen and profits broadly halved since the group raised £50 million at flotation in 2004.
The publicly-quoted studio facility faces a renewed attack by shareholder Crystal Amber on Wednesday, when it announces its half-year results. Pinewood is expected to announce operating profits have fallen from last year’s £3.3 million ($5 million). Crystal Amber thinks that all the value of the company is locked up in its property portfolio. But Michael Grade, chairman of Pinewood Shepperton, insists Pinewood is a media company, not a property developer. Crystal Amber counters that the studio group hasn’t been paying its property assets enough attention. Stockbroker Investec has calculated that 82% of Pinewood’s value lies in its property assets, not studio operations. The group could make a lot of money selling off some of its portfolio.
Grade and his team are thinking about taking Pinewood Shepperton private again, says the Sunday Times. Crystal Amber has been quietly building up its shareholding to nearly 27% — just edging past second-biggest shareholder Peel Holdings. One idea might be to spin off Pinewood’s property management to a Peel executive, freeing up Grade and CEO Ivan Dunleavy to concentrate on running the studio. Hollywood movies shooting in Britain this summer include Disney’s Pirates Of the Caribbean: On Stranger Tides, X-Men: First Class – both at Pinewood – and Captain America, filming at Shepperton.
Pinewood shares floated at 180p back in 2004, but today are worth only 168p.
The former ITV chairman has survived a shareholder rebellion at this morning’s annual general meeting of the company that owns Pinewood and Shepperton film studios.
Crystal Amber, an activist investment fund with 18% of the shares in Pinewood Shepperton has attacked Grade’s “poor stewardship” as chairman of the company. The fund says the board needs fresh leadership.
Grade led the management buyout from Rank in 2000. Profits and return on capital have fallen by more than half since the business was floated in May 2004.
The fund first invested in Pinewood Shepperton 18 months ago because it felt the studio was undervalued. It then put forward its own proposals as to how market perception of the value of the business might be improved. Richard Bernstein, Crystal’s investment adviser, said that although initially well-received, nothing has happened and subsequent meetings with Grade have been “unproductive”.
Pinewood Shepperton says that most shareholders are behind it, which “gives us confidence that they support the board, its stewardship and strategy”.
The group has invited Steven Underwood of investor the Peel Group, which holds 26.6% of the company, to join the board.