Village Roadshow extends movie finance deal
Amid a drought for new outside money in the movie business, Warner Bros.' longtime co-financing partner Village Roadshow Pictures Group has restructured its $900-million facility that was set to expire in September, extending it to 2015 and increasing it modestly to $1 billion.
The increase in available production funds comes as good news for Village Roadshow, although it still falls far short of its earlier financing facility. During the financial meltdown of 2008, Village Roadshow lost access to some of the funds in its then-$1.4 billion facility and ended up owing Warner Bros., which had to step in, $120 million for four pictures including "Get Smart," based on the 1960s TV comedy, and Clint Eastwood's "Gran Torino."
Last year it paid back Warner Bros. that money and managed to set up a $900-million bridge facility that lasted only through this September.
Over the last few months, Greg Basser, chief executive of Village's Australia-based corporate parent Village Roadshow Entertainment Group, worked with the company's existing lenders JPMorgan Chase and Rabobank, as well as with Bank of America Merrill Lynch and other institutional investors, to restructure the company's financing before it ended.
Village Roadshow's $1 billion consists of a $500-million revolving credit facility and $500 million in debt.
The deal comes as the Wall Street money that poured into the movie business between 2005 and 2007 has largely dried up. The only other major film financing agreement to close since the economy collapsed in 2008 was a long-in-the-works $825 million for Steven Spielberg's relaunched DreamWorks Studios last year.
"I don't think there has been a thaw in the market yet," said Basser. "This is more a reflection of who we are than the general economic times."
Village Roadshow has co-financed 61 movies with Warner since 1997 and just four films with other studios. Some of the new funds are already dedicated to several Warner Bros. movies, such as this weekend's "Sex and the City 2" and upcoming sequels to "Sherlock Holmes" and the animated hit "Happy Feet."
"It's great to be given the opportunity to go another 10 or 12 years with Warner Bros.,"said Bruce Berman, chairman of Village Roadshow Pictures.
-- Ben Fritz and Claudia Eller