Paramount Loses $450 Million Financing Deal
Paramount Pictures is in trouble and I don't see a Federation ship on the horizon that's going to swoop in and save them. You probably already knew that their star player is looking to get into business with an alleged Indian video pirate. Then just yesterday the studio admitted to losing a $450 million film financing deal with Deutsche Bank. Normally I wouldn't raise an eyebrow over a financing deal gone bad, but apparently some of the funds were meant to cover films currently in distribution. From The Hollywood Reporter:
- Paramount's outside financing effort was designed to provide production funds for two dozen or more feature films from its upcoming slate, including "Tropic Thunder," produced by DreamWorks
In the case of "Tropic Thunder" it could just be that Paramount just wanted to unload a turkey before Thanksgiving dinner. The press screening that I mentioned doesn't actually include any film critics. Valleywag reports that,"None of the invited reporters, as best we can tell, are film critics." Maybe Paramount was hoping that the Tech Trader Daily blog (one of the invitees) will give the movie a glowing review. The blog sure went easy on the Novellus Q3 Guidance, you know, so maybe they'll come through. As Robert Fulford says,"In the search for useful quotes, no outlet is too obscure". Aside from the flop that "Tropic Thunder" is shaping up to be the studio now has a serious, long-term problem. Where is the money going to come from? The Los Angeles Times reports today that "Paramount does not plan to seek another overall slate deal through a bank but instead will continue to co-finance its movies on a picture-by-picture basis with partners such as Spyglass Entertainment and Level 1 Entertainment, a person familiar with Paramount's strategy said". This does not bode well for Paramount. In the past the same partner (Spyglass) that brought them bombs like "The Love Guru" has turned around and delivered hits to the competition. Today Warner Bros. is sitting on a big pile of cash from the $51 million opening of "Wanted", a Spyglass production. Paramount wakes up in the middle of the night from dreams about that kind of opening. I think it's called the snowball effect. Once the town sees that you're weak, they'll only bring you the projects that no one else will take. For years Paramount couldn't get a decent film off the ground (outside of the Star Trek franchise), and then Spielberg waltzed in and saved them. Now that he's signaling that he wants out, the financing has dried up and people on the lot are having serious meetings about "Love Guru II". If for some reason Level 1 cannot come through with a reboot of the Star Trek franchise (already pushed from Christmas 2008 to May 8, 2009) they'll use the Paramount lot to park cars. If the $450 million from Deutsche Bank was earmarked to pay for the next Star Trek film then Paramount should start hiring valets now.