The man who has succeeded Dino De Laurentiis at the helm of De Laurentiis Entertainment Group expressed hope Tuesday that the company can solve enough of its financial woes to get back into film production in about six months. However, such resumption would be on a smaller scale than before the halt several months ago, Stephen R. Greenwald said in an interview. He spoke of launching "possibly two or three projects."
Last year, the company produced and released nine movies and made seven more that have not been released, he said.
Greenwald became chairman and chief executive of the publicly traded Beverly Hills company Friday after the long expected resignation of its founder. Months before, severe money problems flowing from box office failures brought severe restriction of its operations from the company's lending banks.
The new chief, a lawyer who has been with DEG since it was formed in 1985, outlined some of the facets of the firm's continuing reorganization.
Greenwald noted that the balance of its revolving bank credit has been reduced by about $12 million to a level of $57 million in the past six months and said management is negotiating to modify the terms of the loan agreement.
Meanwhile, he said, the company is negotiating to sell part of the rights to its 350-film library, one of the major assets that have been for sale for months. Calling the library sale a key step, Greenwald said he is optimistic that such a transaction can be completed within "a reasonable period."
Proceeds are earmarked to pay more of the company's debt.
Rethinking U.S. Distribution
For the longer term, DEG's investment bankers are studying ways to add equity capital, probably in a private placement of stock, Greenwald indicated. But he said that nothing along that line is imminent, and the company first must pare its debt further and improve its balance sheet.
Aside from the financial restructuring, Greenwald said, the company is exploring different ways of handling domestic distribution of films, which also has been at a halt in recent months.
Possibilities include doing its own distribution, using another distributor while retaining marketing and advertising control, "or a mix of those," he added. He noted that the company will continue to do its own foreign distribution, which has been one of its strengths.
Having films "backed up" in the pipeline tied up DEG's resources and was one of the factors that led to its financial problems, Greenwald said.
Although its film production has been at a standstill, Greenwald noted that the company does continue to have movies in development stages.
The chief executive expressed hope that DEG can start production later this year in Australia on a television mini-series project about the founding of that country. Called "The Fatal Shore," it is based on Robert Hughes' book of the same name. Greenwald said the company has a development deal with ABC for the project.
Greenwald said that management has broadened its leadership base in the past six months. In particular, he said, it brought in two key executives, marketing expert Gordon Weaver as a member of the office of the president and Howard W. Koch Jr. as production chief. He said they are expected to play important roles when the company is "able to get back in production and distribution in a meaningful way."