Merrill Lynch Provides $500 Million Financing to United Artists
Friday, August 17, 2007
United Artists Entertainment LLC (UA) announced it has secured $500 million in financing through Merrill Lynch. The arrangement provides the studio with financing for the production of 15 to 18 films over the next five years. The specific terms of the transaction are not being disclosed.
Michael Blum, managing director and global head of Structured Finance & Investments at Merrill Lynch, said: "The structure and terms of this financing provide the necessary flexibility for United Artists to achieve its production goals while also attracting strong interest from international investors. The participation in this transaction by over 15 institutional investors based in the U.S., Europe, Asia and Africa demonstrates strong and diverse demand notwithstanding a very challenging market environment."
UA's slate will include a combination of films it develops itself, films that are co-produced or co-financed with other major studios or independent partners, and films that may be acquired through negative pickups or other distribution agreements. The studio expects to release four to six films annually, with green-light authority continuing to vest in UA co-owners Tom Cruise and Paula Wagner, who also serves as the studio's chief executive officer. UA is a partnership between Cruise, Wagner and Metro-Goldwyn-Mayer Studios Inc. (MGM).
The financing is effective immediately and will cover two UA film projects already in the works -- "Lions for Lambs" and "Valkyrie." Directed by Academy Award(R) winning director Robert Redford and starring Redford, Meryl Streep and Tom Cruise, "Lions for Lambs" will be released in the U.S. and abroad on November 9, 2007. "Valkyrie," a WWII thriller directed by Bryan Singer, with Tom Cruise leading an international cast that includes Kenneth Branagh, Bill Nighy, Tom Wilkinson, Carice Van Houten, Eddie Izzard and Terrence Stamp, is currently filming in Germany and will be ready for release in the summer of 2008.
"The closing of this financing is an important milestone for the new United Artists," said UA CEO Wagner. "It leaves us perfectly poised to realize our vision of making movies that are both important and commercial. We are fortunate to have a team of talented executives who know how to nurture and develop a slate with ingenuity as well as financial discipline, and we're buoyed by the enthusiasm of our friends throughout the international film community. And, of course, Tom and I greatly appreciate the support we've received from Merrill Lynch and MGM."
Harry E. Sloan, chairman and CEO, MGM, added: "We are pleased that this new United Artists financing arranged by Merrill Lynch supports the MGM model, providing a solid foundation for its production while also creating a pipeline of high quality films for worldwide distribution by MGM. We are also pleased to see such strong support from Wall Street for Tom and Paula and their team, which has enabled us to close this significant transaction within nine months of launching a new UA."
United Artists Entertainment LLC was formed in November 2006 under a partnership between Tom Cruise, Paula Wagner, and Metro-Goldwyn-Mayer Studios Inc. (MGM), with Wagner serving as CEO. The historic United Artists brand was initially founded some 85 years ago by movie greats Douglas Fairbanks, Charlie Chaplin, Mary Pickford, and D.W. Griffith and, throughout its history, has appeared on such iconic film franchises as Rocky, The Pink Panther and James Bond.
Metro-Goldwyn-Mayer Inc., through its operating subsidiaries is actively engaged in the worldwide production and distribution of motion pictures, television programming, home video, interactive media, music and licensed merchandise.
Merrill Lynch is one of the world's leading wealth management, capital markets and advisory companies with offices in 38 countries and territories and total client assets of approximately $1.7 trillion.
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