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Dealmakers Will Target Entertainment Firms As Hunger For Content Grows: Forecast

By | Monday April 22, 2013 @ 9:01pm PDT

This will be a good year for content creators to put themselves on the block, researchers at PwC project today in a report about likely M&A activity in 2013. Corporate and private equity firms will be looking to bulk up on entertainment, driven in part by tech companies’ need for content that provides “a level of security on prospective cash flows,” the analysis says. Entertainment, media and communications companies “are ahead of the pack in pursuing deals, partnerships and joint ventures to address the accelerated pace of change in consumer behavior,” says PwC U.S. entertainment and media deals partner Bart Spiegel. “Media companies are investing in robust content-management systems and dynamic analytics to not only operate efficiently but also to take advantage of new opportunities.” Some buyers will want entertainment to serve growing overseas markets led by the so-called BRIC countries (Brazil, Russia, India and China). PwC’s bullish forecast follows a robust year for dealmakers: There were 40 film/content transactions last year with a collective value of $9B — including Disney’s $4.1B acquisition of Lucasfilm — the report says. That’s up from 2011, when the industry had 39 deals valued at $1.1B. Forecasters also expect to see additional deals in cable (with buyers attracted to systems’ broadband services), broadcasting (another way to secure distribution) and publishing (Time Warner and Tribune are preparing to sell assets). 

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Lesson Of Toronto: Indie Filmmakers Better Keep Budgets Low As Distribs Grow Stingier

Mike Fleming

Ben AffleckHollywood runs on perception, and the vibe on the recently completed Toronto Film Festival is that the marketplace was a smashing success because of the high volume of acquisitions. The festival itself reported there were 29 major sales to U.S. distributors.

The MasterWhile the sales volume was certainly high, the numbers weren’t. It’s like reading about the record per screen average that Paul Thomas Anderson’s The Master turned in last weekend on five theaters. All I keep thinking is, even though it grossed $729,745 in its opening weekend, the film needs serious legs if its going to recoup the $35 million that Annapurna’s Megan Ellison paid to finance it.

Related: Toronto, Venice, Telluride Fest Wrap-Up

Coming in to Toronto, two things were very clear. The most promising films came in with distributors that bought in early in the process, a trend which will continue to grow as agencies package more of these films, seeded by high net worth individuals and receptive to locking in distributors at script or sizzle reel stage.

AftershockThat took some of the best titles off the table, but it still felt like the abundance of new distributors and star-cast acquisition titles would result in some spirited auctions, the kind that make people overpay. … Read More »

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In Other Deals …

By | Thursday March 31, 2011 @ 5:49pm PDT
Mike Fleming

Former cop and Gangster Squad scribe Will Beall will script the Logan’s Run remake that director Nicolas Winding Refn will do with Ryan Gosling. … Vulture reports that Diego Gonzalez Boneta has bagged the male lead in Rock of Ages, the Adam Shankman-directed musical based on the Broadway show. Actually, he’s not set yet, because New Line brass has to approve him. But he’s Shankman’s choice to star alongside Julianne Hough and a supporting cast that will include Tom Cruise, Alec Baldwin, Russell Brand, Mary J. Blige and maybe Amy Adams. So it’s looking good for the young actor. … Phase 4 Films acquired North American rights to Lucky, the Gil Cates Jr.-directed pic that stars Colin Hanks as a young lottery winner who uses his windfall to pursue the girl of his dreams, trying his best to hide his passion for serial killing.

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Miramax Putting Together Exec Team

The long-running drama of MGM should play out by tomorrow when creditors decide whether or not to embrace a restructuring package that puts Spyglass partners Roger Birnbaum and Gary Barber in control or instead give the MGM assets to Carl Icahn and Lionsgate. Elsewhere, Miramax Films, the other endless custody battle, is starting to come together. Reports have former News Corp exec Mike Lang in talks to become CEO, and MGM television coprexy Jim Packer also in discussions to take a post. All this is contingent on the sale of the company by Disney to Filmyard Holdings that takes place at year’s end. That purchase is backed by Ron Tutor and Colony Capital.

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CAA Sells 35% Minority Interest To TPG: Lovett Says “This Strategic Partnership Marks New Start For Agency’s Future”

By | Friday October 1, 2010 @ 2:25pm PDT

2ND UPDATE 2:20 PM: Sources are now telling me the investment in CAA is tantamount to “hundreds of millions of dollars” in equity and TPG-lined up debt based on a huge valuation of the agency more than double what’s been previously estimated as its worth. One insider this afternoon put the number at $350 million against a valuation of $1 billion. Yikes!

UPDATE 1 PM: News release below. In it, CAA disclosed that the agency and TPG ”have committed to create a $500 million pledge fund, providing access to significant capital for future investments”.

EXCLUSIVE 11:40 AM: This very lucrative deal for a 35% non-controlling minority interest in CAA with the TPG Capital private equity investment firm follows seven months of tough negotiations with potential financial partners pursued by CAA. It represents a big cash infusion considering that CAA’s revenues were around $300 million in 2007 before the financial crisis struck. But the $105M figure estimated by others is only about half the $200M that CAA was initially seeking. The investment was finally wrapped up last night and an announcement will go out later today. ”It’s a real double down play. CAA saw an opportunity to have a partner that has capital and expertise to develop its company faster and stronger and smarter,” an insider tells me. “That’s why it took so long. CAA wanted to be careful about it.”

lourdhuvane1This liquidity event puts CAA on excellent financial footing after many insider reports of cash flow problems. Most importantly, it allows the tenpercentery’s 2nd generation of owners — one-time Young Turks: Bryan Lourd, Kevin Huvane, Richard Lovett, Doc O’Connor — to monetize their individual pieces of Hollywood’s most powerful agency. But are they going to cash out and leave? My sources deny their exits are imminent and insist that the CAA quartet have all signed “long-term commitments”. Additionally, “part of the proceeds will be distributed to the entire company. Everyone who works in this organization will get money, though some more money than others. It’s exciting to be able to do that,” my insider tell me.

CAA LovettAnother reason for the cash need is that CAA has been self-financing its nearly 5-year-old sports business begun by Lovett, despite the fact it’s a notoriously expensive enterprise because of the size of upfront investments in players that don’t pay off for many years. And the powerhouse sports agents which the agency has assembled have been not-so-quietly complaining about their compensation packages. CAA also plans to use the money for expansion into sports production, video games, and other arenas.

Today’s news follows two big investments made by rival WME Entertainment with experienced partners creating new businesses: a worldwide marketing business, and separately a  global media fund of which $300M of the desired $500M is already raised. These are two very different strategies, but both demonstrate how Hollywood agencies want and need to reinvent themselves. CAA is not the first major tenpercentery to take an investor: Connecticut-based Rizvi Traverse Management’s equity fund operator Suhail Rizvi is a substantial investor in ICM.

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IMAX Inks Largest Theatre Deal In Asia

By | Monday September 20, 2010 @ 5:33pm PDT
Nellie Andreeva

New York, NY– September 20, 2010 – IMAX Corporation  today announced that CJ CGV HOLDINGS, LTD, a subsidiary of CJ CGV Co. Ltd., the leading theatre exhibitor in Korea, and the number one exhibitor in Asia, has signed an agreement to install 15 digital IMAX theatre systems in new locations planned for The People’s Republic of China. The deal marks IMAX’s single largest theatre deal in Asia and expands its existing relationship with CJ CGV, which already

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TORONTO: Lionsgate And Roadside Join To Buy Will Ferrell Pic ‘Everything Must Go’

Mike Fleming

EXCLUSIVE: In their second major deal of the Toronto International Film Festival, Lionsgate and Roadside Attractions have teamed to acquire Everything Must Go, the Dan Rush-directed drama that stars Will Ferrell. I’m told the deal was north of a $3 million minimum guarantee. I’ve heard that dealmakers at ICM and CAA had about 5 offers, but finally closed with Lionsgate and Roadside. This is the latest in a spectacular flurry of 11th hour acquisition deals at Toronto heading into the fest’s final weekend. Read More »

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TORONTO: Oscilloscope For ‘Meek’s Cutoff’

Mike Fleming

I’ve been so busy breaking Toronto deals that I didn’t note right away an Oscilloscope press release: it has acquired North American distribution rights to Kelly Reichardt’s Western drama Meek’s Cutoff. Adam Yauch previously distributed Reichardt’s Wendy and Lucy in 2008. Pic premiered during Toronto and will be released next year. Cinetic Media sold it.

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BIG DEAL: WME Forms 1/3 Of New Global Marketing Services Spinoff Company

By | Friday September 17, 2010 @ 5:21pm PDT

EXCLUSIVE: There’s no announcement of this yet. And details are still very sketchy. But I’ve just learned that WME Entertainment’s Ari Emanuel and Patrick Whitesell  have negotiated a deal to join with heavy-hitters Trivergance Founder/Chairman Marc Byron (formerly CEO for Mosaic Group) and Red Peak Group CEO Michael Birkin (the former Vice Chairman of Omnicom), to form LVERAGE, a new global marketing services company. Immediately, clients include such well-known brands as Intel, McDonalds, Adidas, Starbucks, General Motors, Polaroid, Under Armor, and more. While entertainment will be a piece of LVERAGE’s marketing business, it won’t be the majority of its broadbased business. The new company will be based in New York, with offices in Chicago, Los Angeles, and London — all cities where the Red Peak Group operates now.

My understanding is that LVERAGE will operate as a stand-alone entity which in the words of one of my sources is “combining and integrating the services, expertise, and experience” of The Red Peak Group, WME Marketing, and Santa Monica-based REDInteractive.

LVERAGE will be run by Birkin, whose Red Peak Group will now be swallowed whole, and by Byron, whose Trivergance is contributing assets but will stay separate. WME’s Marketing Department also will be swallowed whole, and LVERAGE is now negotiating with its head Mark Dowley to see about coming aboard. [UPDATE: WME’s agency rivals immediately interpreted this as WME throwing in the towel and selling off its marketing department and Dowley along with … Read More »

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Zodiak Could Wreck Warner/Shed Deal

Paris-based Zodiak has bought an 8% stake in UK independent TV producer Shed Media. Another 2% more and Zodiak could stymie Time Warner, which is trying to buy Shed. Cyrte Investments, the investment company of Endemol-founder John De Mol, sold its 7.8% Shed stake to Zodiak on June 1. But the deal has only just come to light in a Stock Market footnote to another Shed investor, Aviva, selling 6% of its shares.

Last month, Zodiak closed a deal to acquire U.K.’s RDF Media Group, already creating the third largest independent TV production company in the world.

Time Warner could pay up to £90 million ($135 million) for Shed. The studio wants Shed, which makes Supernanny for America, because it wants to expand overseas, replicating the success it has had in America with hit shows such as The Wire and Gossip Girl – both of which have exported well. It recently hired ex-Tiger Aspect managing director Andrew Zein to buy independent TV producers and grow Warner Bros’ UK production business.

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And In Other Hollywood Film Deals…

Mike Fleming

A roundup of what else happened today on the deal front: HBO and Playtone partners Tom Hanks and Gary Goetzman are determined to show the versatility of Paul Giamatti. He played American patriot John Adams in the miniseries that won 13 Emmys for Playtone and HBO. Now, they’ve got him playing Russian leader Nikita Khrushchev in K Blows Top, an adaption of the Peter Carlson book that is being scripted as a telepic by Paul Bernbaum. Project was brought Read More »

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‘Narnia’ Director Sets Bedrock Studios Deal

By | Tuesday June 15, 2010 @ 11:21am PDT
Mike Fleming

Bedrock Studios partners Cary Granat and Ed Jones have made their first overall talent deal. They’ve signed Andrew Adamson and Aron Warner to a multi-year development deal to make films under their newly formed Strange Weather Films banner. Adamson worked with Granat when he directed for Walden Media  and Disney the first two installments of The Chronicles of Narnia. He also directed the first two Shrek films, with Warner producing.

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Sam Raimi Hired To Direct ‘Oz’ (& Downey?)

By | Tuesday June 15, 2010 @ 4:10am PDT

raimi wizard downey

UPDATE: Let me confirm that Sam Raimi is set to direct Disney’s extravagant ‘Wizard of Oz’ 3D prequel. I understand that talks to hire Raimi for Oz: The Great And Powerful turned into a deal last night finalized by CAA. It’s a coup for new studio bosses Rich Ross and Sean Bailey, who are rolling the dice big-time by hoping that this pic will be a global hit like the billion-dollar-grossing Alice In Wonderland. “Robert Downey Jr. isn’t set yet. They are going to develop for him, if things go right. The script will be rewritten,” one of my sources says. ”The movie will happen, though.” Downey would play the Wizard Of Oz before he became the Wizard Of Oz circa the 1939 iconic film: he’s in fact a circus wrangler transported by tornado to the mysterious world of Oz where he gets mistaken for a know-it-all. This will be Raimi’s first firm project since he exited Spider-Man 4, which prompted Sony Pictures to reboot the entire franchise earlier this year. Now the only question is whether Sam Raimi can do what Tim Burton just did.

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CAA Negotiating $200M Investment From KKR: Partners Want To Cash Out Of Agency

By | Monday June 14, 2010 @ 10:47am PDT

BREAKING NEWS… 2ND UPDATE: Is this the beginning of the end of another Hollywood agency era? My sources tell me that, after months and months of negotiations with potential financial partners pursued by CAA, the agency has focused on KKR – Kohlberg Kravis Roberts & Co, the NYC-based private equity firm. The deal being bargained is for KKR to invest a whopping $200M in Hollywood’s most powerful agency. CAAlogoThat’s a huge cash infusion considering that CAA’s revenues were around $300M in 2007 before the financial crisis struck. So why does CAA need so much money? This isn’t just for CAA’s sports business, despite the fact it’s a notoriously expensive enterprise (because of the size of upfront investments in players that don’t pay off for many years) and the powerhouse sports agents which the agency has assembled in recent years (who are already not-so-quietly complaining about their compensation packages). And this isn’t just an alternative to self-financing their growth into other businesses like sports production, video games, and other entertainment arenas. No, this is much more about CAA needing to raise additional cash as a liquidity event for its partners.

lourdhuvane1They say that CAA’s 2nd generation of owners — one-time Young Turks: Bryan Lourd, Kevin Huvane, Richard Lovett, Doc O’Connor – are upfront about their desires to cash out of the agency business. That doesn’t mean they are going to leave right away — because of my story CAA today was busy denying any exits are imminent — but they’ve … Read More »

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SHOCKER! Peter Schlessel Leaving Sony

By | Thursday June 10, 2010 @ 3:09pm PDT
Mike Fleming

schlessel_peterEXCLUSIVE: In a surprise move, Peter Schlessel will leave his post as Sony Pictures president of worldwide affairs to become president of GK Films, Graham King’s company. I’m told the move will take place over the next few weeks.

Sony_pictures_logoSchlessel has spent 21 years at the studio, and acted as a  consigliere specializing in making deals that have spanned most of the studio’s divisions. Those have ranged from domestic distribution pacts on films like District 9 and the Michael Jackson documentary This is It!, to offshore distribution on the upcoming Joe Wright-directed Hanna, Terminator Salvation, Book Of Eli and the Showtime series The Tudors, to real estate investments and Sony’s recent lot renovations, to a recent DVD distribution deal for Harvey and Bob Weinstein’s The Weinstein Company.

Among those deals was to bring King’s GK Films over to Sony through the Sony Pictures Worldwide Acquisitions Group. GK Films finances its product and Sony provides global distribution and P&A for a distribution fee. The exit is amicable, I’m told. Schlessel wanted a greater involvement on the creative side and wanted to be more entrepreneurial. He couldn’t go up—Michael Lynton and Amy Pascal aren’t going anywhere—so is going out. He will continue to work with SPE because of the GK Films output deal.

King, with backing from his partner, Texas-based Tim Headington, is looking to expand and has begun to do so in TV with the Starz … Read More »

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Fairy Tales Are Hot! Relativity Media Acquires New Version of ‘Snow White’

By | Thursday June 3, 2010 @ 4:46pm PDT
Mike Fleming

EXCLUSIVE: The billion dollar worldwide gross of Alice in Wonderland has turned public domain fairy tales into the hottest segment of an otherwise sluggish script marketplace. In the latest deal, Relativity Media has made a preemptive acquisition of The Brothers Grimm: Snow White, an edgy 3D re-imagining of the German  folk tale written by Melisa Wallack. Wallack’s script work includes The Dallas Buyer’s Club, and she wrote and directed the 2007 Aaron Eckhart-starrer Bill.

The deal has aggressive progress to production stipulations in the preemptive deal and I’m told the writer will make low seven-figures if the project gets made. ICM repped the writer. The Brothers Grimm: Snow White will be produced by Bernie Goldmann (who produced Meet Bill), Ryan Kavanaugh and Brett Ratner, with Tucker Tooley exec producing and Rat Entertainment exec John Cheng also involved in a producing capacity. Ratner previously got Kavanaugh to acquire the Sundance Film Festival documentary Catfish, and most recently Skyline, the scifi alien invasion thriller directed by Greg and Colin Strause which sold at Cannes.

Deal follows an upfront seven-figure Disney pitch deal for Devil Wears Prada scribe Aline Brosh McKenna to script a re-imagining of Cinderella. Disney also is moving quickly on The Great and Powerful Oz, with Adam Shankman and Timur Bekmambetov circling. Sam Mendes just dropped out of consideration, but there is rumor that Guillermo del Toro might meet on the project now that he’s free of The Hobbit. Warner Bros and New Line each have version of … Read More »

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‘A Lot Of Activity’ On The Upfront Market

By | Wednesday June 2, 2010 @ 7:12pm PDT
Nellie Andreeva

Upfront dealmaking continued to pick up speed today, with market leader, top-rated network Fox, setting up the pace. Fox continued to land major ad commitments both for its sports portfolio, which includes the Super Bowl, and its entertainment programming, at CPM increases in the high single digits (said to be around 9%). The rest of the networks are also in active negotiations with ad agencies.

“There’s a lot of activity,” CBS Corp. CEO Leslie Moonves was quoted as saying today at a Sanford C. Bernstein & Co. conference in New York. “The guarantees are where we’d like them to be. The numbers are where we’d like them to be. It’s a very strong marketplace.” He expects a lot of deals to be completed by end of the week and CBS, the most watched network, to sell as much as 80% of its inventory.

With the upfront market much healthier this year, the networks are expected to hold a lot less of their ad inventory – from 30%-35% last year to 20%-25% this year. That would additionally boost the overall volume of upfront ad sales, which could rise as much as 20% and top $8 billion for the broadcast networks.

At the same conference, Walt Disney Co. CEO Robert Iger said ABC too is “in the middle of selling” an that “the business that we’ve written so far… has been good and in line with what we are expecting.”

Meanwhile, the CW issued a statement this afternoon: “The CW’s upfront sales are moving rapidly. The … Read More »

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Zodiak Acquires RDF To Create Indie Giant

By | Wednesday June 2, 2010 @ 12:51am PDT
Nellie Andreeva

zodiakUPDATED: Paris-based Zodiak Entertainment has closed a deal to acquire U.K.’s RDF Media Group, creating the third largest independent TV production company in the world, rdfbehind Endemol and the RTL-owned FremantleMedia, with annual sales of more than $600 million. Zodiak’s acquisition of RDF, valued at more than $200 million, had david frank 3 copybeen in the works for four months. Upon its completion, RDF CEO David Frank has been named CEO of Zodiak Entertainment. Lorenzo Pellicioli, CEO of De Agostini Group and chairman & CEO of Zodiak, will continue to serve as chairman of the combined company.

Frank stressed how complimentary the two companies’ business are. RDF has presence in the U.K. and the U.S. but has no production entities in mainland Europe. Its in-house distribution unit is focused primarily on unscripted product. Meanwhile, Zodiak’s area of operation is mainland Europe with no presence in the U.K. and the U.S. and it distributes primarily scripted product. “The overlap was minimal,” Frank said.

RDF’s U.S. outpost will now be known as RDF USA, part of the Zodiak Entertainment Group and will serve as a conduit for the Zodiak formats as they’re filtered and adapted for the US marketplace. Reflecting the fact that Zodiak is more heavily involved in scripted shows (the company’s programming mix is about 50-50 between scripted and unscripted vs. 85-15 for RDF … Read More »

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Fox Kicks Off Upfront Market Dealmaking

By | Tuesday June 1, 2010 @ 3:27pm PDT
Nellie Andreeva

As expected, the upfront market started moving after the Memorial Day holiday weekend. Top-rated network Fox led the pack with the first deals today at CPMs increases in the high-single digit range. CBS, the most watched network, has started active negotiations as has CW, with the rest of the broadcast nets also in various stages of early upfront dealmaking. Unlike last year’s protracted upfront market, which stretched through end of July, this year’s buying is expected to be done at a brisk pace, with some or all broadcast nets done by the end of the week. After last year’s recession-fueled dive in overall upfront spending to $6.5 billion at the broadcast networks, the marketplace is poised for a big rebound, possibly in the neighborhood of 20%. Some have even speculated that the broadcast networks’ upfront haul could break a record this year, crossing the $9 billion mark.

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