Uh oh... financing problems?

[Vektor]

Just spotted this one:

The credit crunch has hit home in Hollywood after Paramount Pictures, which has released a string of hit movies this year, was forced to suspend plans for a $450m film financing.

The studio has been working with Deutsche Bank on financing that would have provided funds for up to 30 films, including possible blockbusters such as the sequel to Transformers and a new version of Star Trek.

Link to the full story.

I'm guessing that Trek is probably too far along to shelve it at this point, but I'll be curious to hear what this ultimately means.

 

[Vektor]

Actually, if you read the article carefully, there is a reference to "alternative sources of financing available to Paramount," so maybe it's no big deal after all.

 

[Admiral Buzzkill]

The article does mention that the films affected are likely to be released as scheduled.

Otherwise, we should pressure the Federal government to bail out Paramount along with FreddieMac and FannieMae.

 

[JuanBolio]

I'm kinda pleased to hear they're spending so much on this film that it might actually cause them problems.

Does anyone know if its being filmed on digital, or on traditional film?

 

[Carpe Occasio]

But if the studio fails to revive the deal with another bank it could force Paramount to seek funds from Viacom, the media conglomerate that owns the studio, to produce the titles. This would expose the company to greater financial risk if the films fail to perform as expected.

If STXI bombs Paramount will kill off the franchise for sure.

 

[Admiral Buzzkill]

www.deadlinehollywooddaily.com has some more detail on this.

 

[M'Sharak]

Just spotted this one:

The credit crunch has hit home in Hollywood after Paramount Pictures, which has released a string of hit movies this year, was forced to suspend plans for a $450m film financing.

The studio has been working with Deutsche Bank on financing that would have provided funds for up to 30 films, including possible blockbusters such as the sequel to Transformers and a new version of Star Trek.

Link to the full story.

Actually, if you read the article carefully, there is a reference to "alternative sources of financing available to Paramount," so maybe it's no big deal after all.

I followed your link and don't see any more article beyond what you've already quoted here; there's nothing at all to read (carefully or otherwise) about "alternative sources of financing". Is this additional content for the subscribed/registered only, or is there another link which "walk-ins" can use?

 

[Vektor]

I followed your link and don't see any more article beyond what you've already quoted here; there's nothing at all to read (carefully or otherwise) about "alternative sources of financing". Is this additional content for the subscribed/registered only, or is there another link which "walk-ins" can use?

I originally got to it from the Drudge Report and was able to read the entire article. My link appears to be the same as the one on Drudge but leads to a subscriber limited version.

Honestly, there's not much more to it than what's already been said. It's a little inconvenient for Paramount but apparently will not affect Trek or most of their other film projects at all. As usual, TrekMovie.com has the latest and greatest info and what it really means.

 

[M'Sharak]

^ Thanks for the explanation, Vektor.

Dennis' link, posted while I was writing my previous entry, also helps fill in some of the blanks. All in all, a nasty pothole in the road, but not likely to cause any great problems in the long run, it sounds like.

 

[pookha]

actually reading the new york times it seems this may have been Paramount's idea.
and it wasn't close to being majority financing for the films.

ny times

Paramount Pictures said it had withdrawn from a planned film finance deal that was meant to raise as much as $450 million through a now-disbanded entertainment venture of Deutsche Bank.

A Paramount spokeswoman, Patricia S. Rockenwagner, said in an e-mail message, however, that the decision to end the financing plan would not affect the studio’s ability to produce a full slate of films

The Deutsche Bank venture would have provided only 25 percent of the financing for Paramount’s films, and the company has continued to get backing from other outside partnerships for many of its movies, including “Transformers 2

ny daily news

and they may have been getting wary of being on the sidelines near deutsche bank
messes..
or maybe M & T are not the only group they have not been upfront about

Now M&T is trying to recover some of those losses. The bank filed a lawsuit last month against Deutsche Bank AG, seeking $82 million for losses stemming from CDOs that a subsidiary of the German bank sold to M&T. The lawsuit alleges that Deutsche Bank withheld material information that would have resulted in lower ratings for the securities that a Deutsche Bank subsidiary sold to M&T.

morgan Stanley also sees problems with DB

- Morgan Stanley cut Deutsche Bank (DBKGn.DE: Quote, Profile, Research) to "underweight" and recommended shorting the stock

variety confirms paramount walked away
and co financing in place for several films including a certain trek film

 

[pookha]

www.deadlinehollywooddaily.com has some more detail on this.

sorry i missed this when i was working on my post.
it seems to be the most balanced of theam all..
sorta in between the ft and ny times .

Dresder Kleinwort a year ago to jumpstart what was considered a lagging division. What was being discussed was an overall deal for 30 films that only financed 25% of each movie and capped at $30M. It was, in the words of one Paramount exec to me, "Just a drop in the bucket." Then, about a month ago, the trio came to Paramount bosses with a status report on the deal. And Brad Grey et al didn't like it. "It was not strong enough. It gave too much money away if the pics do well and not offset enough of the risk if the pics don't," an insider told me. "So we notified them two weeks ago that the deal didn't make any economic sense and there was no point to this. What we decided was to walk away. And having lost this piece of business, they shut the division down."