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http://www.newsarama.com/forums/showthread.php?s=&threadid=32676
So Marvel will get more creative control over their movies, bigger profits and of course, bigger risks.
MARVEL: FROM COMIC PUBLISHER TO MOVIE PRODUCTION HOUSE
According to Variety, Paramount is throwing its hat in the superhero movie ring with Marvel, signing an exclusive distribution deal with the company for upcoming movies based on the publishers characters. 10 films are in the pipe as a result of the deal, including Captain America and Nick Fury.
What will be different with these films and this relationship is that Paramount will distribute the films to theaters Marvel will produce, which will be a new stage for the company to enter into. The deal will put virtually full creative control back into Marvels hands, as theirs will be the money being put up for the projects. Likewise, the possible return for Marvel on these films will be significantly higher than on other projects which were produced by studios other than Marvel.
To do thism Marvel has already amassed a production war chest of around $500 million, which will the company to produce a slate of movies based on characters which already dont have deals in the works (the 4,700 5,000 characters Marvel touts in its press releases). To fund the films, Marvel has established a $525 million revolving credit facility with Merrill Lynch Commercial Finance Corporation. The credit was secured against the movie rights to 10 Marvel characters, including Captain America.
As a result, Paramount will not have to put up any money for production, but instead, will be paid by Marvel for marketing and distributing the initial 10 films.
Reportedly, budgets for the upcoming films may range as high as $180 million. The first movie of the deal (yet unnamed) is slated to hit in two years, according to the trade, and all the films will be rated PG or PG-13 to ensure the largest audience.
Some observers are comparing Marvel's move akin to something that puts the company on smiliar footing as Pixar. While Marvel does not have it's own studio in which to shoot the films, both companies own a profitable collection of characters, produce their own films, and (now) see them distributed by larger studios.
Marvel's press release for the deal reads:
Marvel Enterprises, Inc. and Paramount Pictures, a part of the entertainment operations of Viacom, Inc. (NYSE: VIA and VIAB) announced that they have entered into an agreement under which Paramount will distribute a slate of feature films to be produced by Marvel. Marvel also announced a new, non-recourse financing facility to be provided by Merrill Lynch Commercial Finance Corp. that will allow the company to produce its own slate of feature films based on its renowned comic book characters.
"We are excited to be building our own film slate, and to be doing so using non-recourse financing," said Avi Arad, Chairman and CEO, Marvel Studios. "Paramount Pictures has the most collaborative and creative team in the business to help us market our films. Under its new leadership, we've found Paramount to be exceptional in every way and look forward to working together for a long, long time."
"Marvel has become a marquee entertainment brand," said Brad Grey, Chairman and CEO of Paramount Pictures. "It speaks to Marvel's strength in the marketplace and the great popularity of its brand and characters that Marvel can obtain such innovative financing for its film slate. We are thrilled to partner with them in this new venture."
Marvel has obtained a financing commitment from Merrill Lynch Commercial Finance Corp. for a $525 million non-recourse revolving credit facility over seven years to permit Marvel to fund the production of its film slate. The facility will be secured by the theatrical and motion picture production and distribution rights for ten Marvel characters. The non-recourse element of the structure limits Marvel's cash risk to un-reimbursed development costs and general incremental overhead.
Marvel expects that producing its own slate of films will permit it to obtain greater participation in all revenue streams related to its films and the opportunity to begin building its own film library. The finance structure will also allow Marvel to receive a producer fee for each film and retain all merchandising revenues. Paramount will receive a distribution fee for each film it distributes and will retain worldwide distribution rights in sequels to the films covered under the agreement.
The distribution agreement between Paramount and Marvel specifies that Marvel may deliver up to ten films to Paramount over an eight-year period, with the first titles including "Captain America" and "Nick Fury." Marvel's budgets for each film may range from $45 million to $180 million. The first picture is expected to be released in 2007 or 2008. Paramount will not contribute to production costs, although it will provide advance funding of promotion and advertising for the films.
Marvel's financing is subject to numerous contingencies, including
the negotiation of definitive financing and distribution agreements. There is no assurance that the financing will be completed.
Relativity Management, Inc. assisted Marvel with the structuring of the financing.
So Marvel will get more creative control over their movies, bigger profits and of course, bigger risks.
