3 Japanese Firms Agree to Invest in MGM/UA Films

Three Japanese business giants have agreed to invest in a joint movie financing venture with MGM/UA Communications, the parties said Tuesday. The Culver City entertainment firm declined to say how much money the Japanese will invest.

The three firms--C. Itoh & Co., Suntory Limited and Tokyo Broadcasting Systems--are forming an American corporation, CST Communications, for the enterprise, which will be based in Hollywood.

Itoh is a trading company, Suntory is a privately owned liquor concern and Tokyo Broadcasting is Japan’s largest commercial broadcasting company.

Motion picture companies, large and small, commonly tap into both private and public investment sources to raise money for the joint financing of films. By doing so, the studios can spread their own resources over more projects and share the downside risk inherent in film making.

Such investments by outsiders sometimes have ranged to more than $100 million and have gone as high as the $300 million raised early this year by Silver Screen Partners for a venture with Walt Disney Co.

Just last month, Florida-based Star Partners Ltd. announced that it would seek to raise $75 million in limited partnership interests for movie production and distribution in a joint venture with MGM/UA.

On Tuesday, MGM/UA Chairman Lee Rich called the agreement with the Japanese firms an important part of the company’s “plan to diversify our financial resources,” adding:

“We are tremendously pleased and honored to have begun this association with three of Japan’s most prestigious and respected companies and look forward to building a partnership that will endure for many years to come.”

MGM/UA, controlled by financier Kirk Kerkorian, reported a net loss of $41.9 million on revenue of $309.6 million in the first nine months of fiscal 1987.