After The Dark Knight, Film Financing's Own Dark Night?

Even as the film industry eagerly awaits a chance to pat itself on the back as recession proof--The Dark Knight has reportedly set an opening night record at around $60 million, and the rest of the weekend release slate (like Mamma Mia!) looks capable of propelling the aggregate three-day box office to a point near or beyond previous highs--Wall Street is showing a good deal of skepticism.

A wide-ranging survey assembled today by the Los Angeles Times of the until recently generous-minded banking industry describes a situation whereby, "The pullback could set the studios scrambling to find alternative sources of capital to help mitigate risk on their movie slates as filmmaking and marketing costs continue to climb."

The story scrutinizes the prospects for studios like MGM (which has an infusion of new executive talent and a tricky movie to market in the Tom Cruise starrer, Valkyrie) and Paramount, which despite a huge box office run appears to be staggering a bit as DreamWorks prepares for an almost certain exit and the costly Vantage division is folded into big Par after sending a big wad of cash on some highly virtuous and mostly unprofitable films.

Underscoring Paramount's challenge is the collapse of a planned $450 million credit line with Deutsche Bank. The studio spun the plug-pulling as being due to unattractive terms, but according to the Times, those terms were due to Deutsche's inability to find investors to share the senior debt.

Also portrayed is a season of departures from the banking ranks of some formerly heralded dealmakers. A notable exception to the trend is the potential deal in which India's Reliance Big Entertainment may yet lavish $1.2 billion of DreamWorks (after deals with Tom Hanks, Brad Pitt and George Clooney).

Media analyst Harold Vogel saw a bright side in reduced production, as the studios would be forced to reduce their slates and thereby give their featured releases a bit more breathing room in a crowded marketplace.

In a related story, Variety contemplated the current upswing in television production --on the heels of both daytime and prime time agreement between the companies and the American federation of Television and Radio Artists--and the first signs of an accompanying reduction in feature production. (The exception is indie features which are thriving under waiver agreements from SAG, and attracting not just capital, but normally high-priced talent in he absence of the usual array of feature starts).

Most of the majors well set for their 2009 release slate (thanks to a recent production surge that arose out of fears over the writers' strike this past winter), but now, with a few exceptions--like Angels and Demons, Terminator Salvation, and Ridley Scott's Nottingham staring Russell Crowe, --the studios are choking off the feature production pipeline.

"It's a war of attrition," says entertainment attorney and industry commentator Jonathan Handel, who said that if some kind of agreement can't be forged by August 15, Hollywood could be facing very slim productivity indeed. A SAG meeting on Saturday was expected to provide a clue to the thinking of both the membership, who seemingly aren't resolute in sufficient numbers to cast the needed 75 percent vote to strike, and the leadership, who may find themselves isolated as they confront, as Handel notes, "a town that's sick and tired of all this."

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