In an era when movie capital is tough to come by, David Ellison, the 27-year-old son of Oracle Corp. co-founder and Chief Executive Larry Ellison, has raised $350 million to co-finance films with his studio partner Paramount Pictures.
The funds — $150 million in equity and a four-year, $200-million revolving credit facility led by JPMorgan Chase & Co. — will enable Ellison to step up production at his movie label Skydance Productions. Ellison's father, ranked by Forbes magazine as the sixth-richest person in the world, with an estimated net worth of $28 billion, provided an undisclosed portion of the equity, according to people with knowledge of the deal. The remainder came from multiple unnamed investors.
Ellison hopes to make four to six movies a year at his Santa Monica production company, a mix of big-budget action, adventure, science fiction and fantasy films as well as modestly budgeted comedies and genre pictures. Ellison has just hired former Village Roadshow Pictures production chief Dana Goldberg to oversee development and production.
Ellison had been trying to raise money since last fall, when it was announced that he had signed a four-year co-financing, production and distribution agreement with Paramount.
Under the new deal, Skydance, which Ellison founded in 2006, will get first look at the majority of movies that Paramount greenlights for production with the option to co-finance and co-produce them. In turn, Paramount will have first dibs on all of Skydance's projects in development with the opportunity to co-finance and distribute a number of movies that the company produces.
"Our partnership with Paramount gives us the ability to deliver the highest level of commercial event entertainment," Ellison said.
Ellison's financing is a boon for Paramount, which had been without a movie-slate financing deal for the last two years. In 2008, amid the economic downturn's credit crunch, the studio, owned by Viacom Inc., failed to raise $450 million in film capital through Deutsche Bank. Other studios, including debt-strapped MGM, also failed to secure new slate financing as investors and lending institutions grew wary after some disappointing returns and declining DVD and television sales.
"The fact that David received support from such a broad group of banks in this very challenging credit market is a testament to his sound film investment strategy and overall vision for Skydance," said David Shaheen, managing director of JPMorgan's Entertainment Industries Group, which engineered the deal with co-lead banks Bank of America, Comerica and Union Bank, along with City National Bank, Citibank and First California Bank.
In the volatile movie business, where production and market costs continue to soar, studios came to depend on outside investors to help mitigate the risk of their films. Universal Pictures, for example, relies on private-equity-backed Relativity Media to co-finance 75% of its annual movie slate.
Paramount has relied on such financing partners as Spyglass Entertainment to share the production costs on such big-budget pictures as the Steve Carell comedy "Dinner for Schmucks" (along with DreamWorks as a third investor) and last year's "Star Trek" and "G.I. Joe."
The first big-budget pictures that Ellison will co-finance with Paramount are "Mission: Impossible 4," starring Tom Cruise and directed by Brad Bird, which will begin shooting in the fall; "True Grit," starring Matt Damon, Josh Brolin and Jeff Bridges and directed by Joel and Ethan Coen, which is currently in post-production and launches Christmas Day; and an untitled movie based on the Jack Ryan character from Tom Clancy's bestselling books that will star Chris Pine. It will be produced by Lorenzo di Bonaventura and Mace Neufeld and is in negotiations to be directed by Jack Bender. Skydance also is co-developing with Paramount "License to Steal," an action comedy about the high-end repo business, to be produced with Alex Kurtzman and Roberto Orci.
Ellison has a number of moderately budgeted projects in development at Skydance, including an untitled comedy written by David Caspe to star Charlize Theron, and "Hyde," based on the Dark Horse comic "The Strange Case of Hyde," which is being adapted for the big screen by Cole Haddon and produced with Mark Gordon and Dark Horse Entertainment.
A USC film school graduate, Ellison began his career as an actor and embarked on feature production in 2006 with the World War I drama "Flyboys," a box-office disappointment that he starred in and co-financed with MGM. He had other acting roles in small independent movies but said he has no plans to go before the cameras on any future Skydance productions.
Ellison named his production company Skydance after his passion for flying. An accomplished aerobatic pilot, Ellison houses several small planes at the Santa Monica Municipal Airport, where he bases the production company.