Cross Creek Pictures, a new film fund backed by US oil and gas players, has jumped onto Hollywood’s radar with its first investment, Black Swan. Its president, Brian Oliver, tells Mike Goodridge the company’s gameplan
It’s not unusual for Brian Oliver, the president of Cross Creek Pictures and now Oscar-nominated producer of Black Swan, to run into financiers or executives around Los Angeles who passed on the film. And inevitably they all feel the need to share what went through their heads when they said no.
“Everyone I meet has to tell me why they didn’t do it,” he laughs. “That’s OK, everyone passes on something that turns out to be great. We’re just happy that we didn’t.”
At time of going to press, Darren Aronofsky’s unnerving psychological thriller about the meltdown of a prima ballerina has taken an astonishing $90m in North America and, with five major nominations under its belt including best picture, director and actress, it should stride past $100m in a fortnight. Internationally, it looks set for even greater results. In its first weekend (January 21-23), it took $10.9m in just nine territories, including a knockout UK opening of $4.4m (£2.76m) — the biggest ever for a Fox Searchlight film in the UK.
For a picture budgeted at $17m, it is a major win for Cross Creek, which co-financed Black Swan 50/50 with Searchlight. Even sweeter is the fact it marks Cross Creek’s first investment after the company was launched in 2009.
Against the current
So why did Black Swan get so many passes in the Hollywood community? “I don’t think Darren was the trouble,” says Oliver, a smart and affable man who read the script within an hour of receiving it and boarded the project immediately. “Everyone knows Darren is a great director but I think a lot of people had a hard time believing you could make a ballet thriller.”
‘Everyone knows Darren is a great director. I think a lot of people had a hard time believing you could make a ballet thriller’
Andres Heinz’s script, originally titled The Understudy, was first set up at Universal a decade ago by Mike Medavoy and Arnie Messer’s Phoenix Pictures, and Aronofsky — fresh off the success of Pi — became attached. Some years later, John McLaughlin was hired to rewrite it, moving the setting from the theatre to the world of ballet. Revisiting it years later still, Aronofsky enlisted Mark Heyman to do a second rewrite incorporating Swan Lake and, with Natalie Portman confirmed in the title role, CAA started to put together the financing.
Cross Creek came on board as the equity component in Black Swan, the tax credit from New York was secured, and would eventually return $4m of the budget; a sales agent was hired to sell the film in international and another company was to provide the international guarantee.
“When we went further along to close the deal, we realised some of the elements were loose and when we tried to close, we realised we were the only real financing,” recalls Oliver. “Searchlight wasn’t in at that point. We’d only started talking to them about doing domestic distribution.”
At the 11th hour, Oliver, Aronofsky and his producing partner Scott Franklin approached Searchlight about a co-financing deal whereby Fox would have worldwide rights. “As much as we saved the movie because we were cashflowing before there was anything there, Fox Searchlight did too,” says Oliver. “If they hadn’t come in, we would have had to fully finance which would have been very difficult.”
Certainly, Cross Creek was not established with a view to taking that kind of risk, no matter how big the potential rewards. Oliver created the company after spending more than a decade in Hollywood, first in the film department at the William Morris Agency, then as a vice-president of production at Propaganda Films, then as head of his own production company, Arthaus Films. Closely connected to the worlds of both talent and finance, he also found himself advising Louisiana-based oil millionaire Timmy Thompson, who had just financed a small US independent film, Burning Palms.
“He had done it in the way every investor who comes into Hollywood does, which is to write a cheque,” says Oliver. “But he’s a very intelligent guy and he saw an opportunity here. He said Hollywood in 2009 reminded him of the oilfields in the 1980s when everything was leveraging and there was no equity.”
Aware the dearth of equity would give them the pick of independent projects, Oliver and Thompson created a business plan based in the traditional model of financing films through equity, tax incentives and international sales. But this time, says Oliver, the point was to deliver an ongoing return to the investor.
“I think producers have a goal of getting their movies made, while financiers have a different goal — to sustain their financing and get a return,” he says. “Hollywood has a long-standing tradition of abusing equity, yet our whole industry is dependent on having equity around to make the movies.”
Thompson brought in eight of his business associates from the oil and gas industries in Texas and Louisiana and put together the three-year $40m fund. “Our pitch to investors was that we would not change the business model during the process,” says Oliver. “We’re going to show them that it works and stick to it.”
Split rights model
The ideal film package sees Cross Creek put up a maximum of 35% of the budget in equity. “If we have a distributor, we can co-finance with a studio like we did on Black Swan, but that’s not our typical model,” he says. “We prefer a split-rights deal where we keep certain territories, sell off certain territories, use the pre-sales and soft money and gap the rest. We’re not reinventing the wheel, we’re just applying it to projects we really believe in.”
A more conventional example of the Cross Creek model is George Clooney’s The Ides Of March, a $22m drama it is co-financing with Exclusive Media Group. Exclusive sold all international on that film, Sony/Columbia came in as domestic distributor and tax credits from the states of Michigan and Ohio will kick in about $4m. “Without the state tax credits, our business model doesn’t work,” says Oliver. “The rebates are keeping production alive.”
In post-production for Cross Creek is The Woman In Black, a UK period mystery written by Jane Goldman, directed by James Watkins and starring Daniel Radcliffe. It was financed one third by Cross Creek, one third by Hammer Films (a division of Exclusive) and one third by Alliance which takes UK, Canada and Spain for its distribution units.
‘We are very selective. And I think you have to be. Choosing the right films is half the battle’
“My game plan is to take somewhat commercial material and marry it with artistic directors at a budget level that makes sense,” says Oliver. “When I read Black Swan, I couldn’t believe Darren was doing something that could be so commercial. It had the thriller bones and when you heard his take, he wanted to play up the horror and psychological thriller elements. I know it’s easy to say it now, but it seemed like a no-brainer.”
Oliver is no fool and knows when he is being sold something which has limited commercial potential. “If you take artistic material and marry it with artistic directors, you get really artsy material,” he says.
Cross Creek also has two genre pictures in the works with Eli Roth producing, Clown and Aftershock, both of which are attracting heat in the worldwide marketplace. “I’m getting to know the foreign distributors as well as the domestic ones,” he says. “If you can prove to them that you’re going to be delivering quality content, there’s a lot they can do. They need the movies.”
Oliver and Thompson are already hatching a second Cross Creek fund which will have grander production and financing ambitions, but in the meantime Oliver is managing his investors’ expectations after the phenomenal success of Black Swan and doing his best to back more winners.
“There are not that many equity people in town so I’m sure we all see the same stuff,” he says. “But we’re very selective. And I think you have to be. Choosing the right films is half the battle.”