LOS ANGELES: Business school graduates turn financiers in Hollywood, bringing a dash of professionalism and oodles of moolah as they provide value to film makers and get them to sign on the dotted line, proof being the recent Oscar nominated “Babel”.
Six years ago, Hollywood's Endeavour talent agency, known for its contribution in making "Entourage" on HBO a success, had a question: Why should a star or director work for low pay on a labour of love to see a film studio or foreign sales company strike it rich, if the movie thrives in worldwide theatres and video markets? Wouldn’t it be better to put those dollars in pockets of clients and agents who represent them?
By late 2003, a young agent, Mordecai Wiczyk, under the wing of the Endeavour partners Ariel Emanuel and Patrick Whitesell, joined with a Harvard Business School classmate, Asif Satchu, to do just that by creating Media Rights Capital.
It soon built high-profile movies,like Alejandro Gonzalez Inarritu's "Babel" and the comedic actor Sacha Baron Cohen's “Bruno" -- around clients of Endeavour, which were given part ownership in return for helping find film projects and make deals.
AT&T and the advertising conglomerate WPP Group joined Goldman Sachs as investors. This combination allowed Media Rights to invest $400 million (Rs1800 crore) a year into movies, television shows and broadband Internet episodes, a considerable amount even at a time when Hollywood has aspiring financiers aplenty.
If they succeed, the pair may help shift the balance of power in Hollywood by increasing opportunity for idiosyncratic movies like the multilingual "Babel," and by giving filmmakers and stars more earning power and ownership of their projects.
The process works something like this: Get people who are interested to give information and data which helps artists seize the value in their own work. They dream big like looking at financing 10 films, five or six television shows and 20 mobile or broadband shows annually.
A financier's connection with a talent agency is not a novelty in Hollywood. Stung by the studios' continuing retreat from star-driven films, talent companies like Creative Artists Agency, William Morris Agency, International Creative Management and the United Talent Agency have sought to connect their clients with alternative financing.
Films backed by financiers include substantial talent from other agencies like Brad Pitt and Cate Blanchett, stars of "Babel," who are represented by Creative Artists.
But virtually all of the company's projects have been built around an Endeavour-backed participant, like the actor Jude Law in "Sleuth," or Hugh Jackman, in "The Tourist." Media Rights has been careful to distinguish itself as a financier rather than producer. Representatives of Endeavour and Media Rights said the two companies became involved only after a legal reviewby an outside labour lawyer.
“Babel” made $114 million (Rs503 crore) at the box office. Paramount will most likely have strong sales from DVD, thanks to the movie's Oscar nominations, though it invested heavily in a sustained award campaign.
According to Jon Kilik, a producer of "Babel," the film cost about $30 million (Rs135 crore) to make, and Paramount Vantage paid less than the production cost for its rights. Kilik said Media Rights assisted the process by providing what he called bridge financing, which held the movie together for several months while talent deals and more conventional film lending were put in place. Financial benefit from the deal was ultimately split among Inarritu, the producers, stars and writer of the film, he said. And at the end of the day, no one is complaining.