More "Summit" Talk

Day-two coverage of Rob Friedman and Patrick Wachsberger's new Summit Entertainment deal--what had become Hollywood's worst kept secret for the past month or so--sheds more light on the actual nuts and bolts of the new studio that has $1 billion worth of funding from Merrill Lynch and shares the same name as Wachsberger's old production/distribution/international sales entity. From the Hollywood Reporter:

Each year, the company plans to produce about eight films for worldwide distribution and acquire about four films for distribution domestically and in other territories. Titles are expected to range from $15 million-$60 million in a wide variety of genres that Friedman described as "studio commercial fare."

Here's what Variety finds unique about the deal:

Financing pact also marks a turning point for the private equity investors looking to cash in on the film biz. Much of the money that has flooded into Hollywood has gone to studio slate deals and, more recently, individual producers. But the studios retain a lock hold on distribution fees, a guaranteed and lucrative source of revenue.This is the first major deal whereby investors are getting into the distribution game. "The real focus here is distribution, which is a good place to be," Merrill Lynch managing director Michael Blum said. Blum heads Merrill's global structured finance and investments wing.

Summit plans to stay lean and keeps its overhead low, according to the LA Times, with their staff growing from 50 to around 120 employees. The paper notes that Summit still lacks a pay TV deal and a library of films that could help them to stay cash-solvent in the volatile movie biz, but mentions that Summit "does have an ongoing business" and that the new capital "adds a domestic theatrical and home video component to the firm that Wachsberger has led since 1993." The paper also offers some more context to the deal:

Summit is the latest in a spate of movie upstarts. Last fall former MGM Vice Chairman Chris McGurk launched Overture Films, with $500 million in backing from Liberty Media Corp. A key element of Overture's deal is access to pay TV through Liberty's Starz cable channels.

Bob and Harvey Weinstein, founders of Miramax Film Corp., said they had raised $1.2 billion for their new Weinstein Co.

Over the years, scores of independent companies have come and gone. Even DreamWorks SKG, launched with $2 billion in 1994 by Steven Spielberg, David Geffen and Jeffrey Katzenberg, had a hard time as an independent studio. DreamWorks' live-action division was sold to Viacom Inc. nearly two years ago, and the animation division was spun off.

Weinstein Co. has also struggled, with such releases as the Quentin Tarantino/Robert Rodriguez film "Grindhouse" proving to be a disappointment.

Still, how nice is it to see the launch of a new studio? (To celebrate, I've decided to have champagne this morning instead of coffee.) For the past couple years, it's felt like Hollywood has been in a bigger state of recession than Nic Cage's hairline, with box office stagnant, MGM changing hands and essentially shutting down, major studios shrinking their slates. But now box office is on its way back up, MGM has re-emerged and Summit is joining the mix (although I'm not quite sure what to make of their "parking lot thriller P2 starring Wes Bentley.") Here's to Wall Street largesse! Let's just hope it takes them a few more years to realize (yet again) that investing in the movie business is a lot like letting your two-year-old daughter pick ponies at the track.