Bidding to play a part in more "tentpole" pictures and increaseits range of options, Village Roadshow Pictures (VRP), the five-year-oldproduction arm of Australian-based Village Roadshow Limited (VRL), announcedtoday (Feb 11) that it had boosted its co-financing deal with Warner Bros bycommitting a revolving $1bn. The investment applies to the studio's current andupcoming pictures and includes the two scheduled Matrix sequels, The Matrix Reloaded and The Matrix Revolutions, which are due out in May and November.
Bruce Berman, chairman and CEO of Village Roadshow PicturesEntertainment, said the funding boost signified confidence in the partnershipand would allow VRP to broaden its scope. "When we started out five years agothere were budget limits that are no longer applicable now," he told ScreenDaily. "We can really replicate on a smaller scale the same kind of portfoliothe studios use with less expensive movies, medium-budget movies and expensiveones." VRP and Warner Bros first collaborated on Analyze This and The Matrix in 1998. Warner Bros will continue to bethe exclusive distributor for the pictures on a worldwide basis, with theexception of Australia, New Zealand, Greece and Singapore, which will continueto be handled by Village Roadshow's theatrical distribution operations.
"Financing for VRP films is the same now as it was before, withthe same lead bank and primary partner; it's just that we'll have greaterflexibility with the films we can choose," Berman added. VRP will continue tobe involved in an annual average of six to eight titles, which Berman saidcould rise to 10 some years, although there was "no hard-and-fast rule". As anexample of VRP's greater flexibility Berman pointed out the company'sinvestment in Troy,the historical epic starring Brad Pitt and Eric Bana to be directed by WolfgangPetersen and due out in summer 2004. "This is a project we might not have beenable to do under our old financing strategy. We were originally offered thechance to co-produce The Perfect Storm but couldn't do it at the time. Now we will be able toparticipate in a wider variety of some of the more important tentpoles. It'sexciting that in a world where media companies are getting squeezed we are morerobust than ever and both our parent companies and financial backers feel theywant this relationship and this company to be expanded."
To date, pictures from Warner Bros and VRP include The Matrix,Ocean's Eleven, Space Cowboys, Deep Blue Sea, Cats & Dogs, Analyze This,Training Day and, fromCastle Rock, Miss Congeniality and Two Weeks Notice. This year's collaborations include the Matrix sequels, the Clint Eastwood thriller MysticRiver, the Ice Cubeaction picture Torqueand, with Castle Rock, the Stephen King horror adaptation Dreamcatcher. A provisional 2004 release slateincludes Troy, TakingLives and Ocean'sTwelve, StevenSoderbergh's sequel to Ocean's Eleven.
The financing for VRP films previously was made available througha special purpose off balance sheet entity, Village Roadshow Films (BVI)Limited (VRF), in which VRL had a 19.9% interest. VRL has bought out theexisting shareholders and provided 100% of the increased (effective) equityand, as a consequence, VRF will now be consolidated as a subsidiary. VRF'sborrowing limit has been increased from $750m to $900m. Given the increased VRLcontributions, the revolving facility continues to be limited recourse andinvolves a syndicate of banks, led by CIBC World Markets, which extends forthree years through to Jan 2006.