UK sales and financing house Winchester Entertainment, which unveiled interim results on Nov 15, has confirmed that it has ended its vaunted deal with US producer Chuck Gordon
The Gordon deal, which first established a Hollywood presence for Winchester, expired without yielding a single film. Winchester spent a year assembling a network of international distributors for the deal, which drew in financing from Cobalt Media Group, but has since struck a string of deals with other US producers
"There was no point in renewing it when it was not producing any films," said Winchester chief executive Gary Smith.
One US production, MGM comedy Heartbreakers, helped Winchester increase turnover for the six months ended September 30 to $5.91m, up from $3.46m during the same period the year before. But pre-tax profits were only up to just over $1.43m, compared to last year's $1.39m, as operating expenses rose.
Heartbreakers racked up more than $26m in advances and minimum guarantees from international distributors. The rise was also down to sales on UK title Last Orders and executive producer fees on two more US titles - Scorched and Runaway Jane.
Smith estimated that about 30% of the rise in costs was due to US activities such as appointing a new law firm. Winchester has also invested more than $1m into development and overheads at high-profile US production companies Wind Dancer and The Donners' Company.
However, the company expects to recoup all its costs to date on Wind Dancer and The Donners' Co if only one film goes into production. Winchester aims to go into production on two significant US projects in the first quarter next year, while production is to start late next year on the Donner's Sam And George, a drama-thriller starring Mel Gibson.
Part of the rise in costs was due to UK distribution activities, which Winchester is stepping up next year. Along with Winchester titles such as Scorched and Runaway Jane, the distribution arm has agreed to acquire all UK rights to Intermedia's Slap Her She's French and Beyond Films' Lantana. Winchester expects to release both in the second quarter next year.
Winchester shares slumped by more than 14% at one point on Thursday (Oct 15) before recovering to 158.5, down 3.1%, at press time.