LOS ANGELES - When the eagerly awaited "Coming to America" and "Mission: Impossible" sequels hit theaters this year and next, Brian Oliver will see his company's credits onscreen in a way he says wasn't likely before the pandemic.
Last month, the 49-year-old Oscar-nominated producer and financier signed a more than $200-million deal with Paramount Pictures to fund up to a quarter of the budget on 10 movies, including next year's "Top Gun: Maverick." In exchange, he will share in any profits or losses from the movies.
He views the multipicture finance deal as a sign that studios are increasingly eager to bring in partners to help mitigate the risks of financing in movies at a time when theaters remain largely shut down. Oliver had previously only partnered with Paramount on individual, non-franchise projects such as the Elton John biopic "Rocketman."
"I don't think we would have this deal with Paramount if the pandemic didn't happen," said Oliver, founder and chief executive of Los Angeles based New Republic Pictures. "The longer the theatrical market is inhibited by the pandemic the more you are going to see studios seeking out other financing."
COVID-19 has upended the revenue streams that Hollywood could once depend on. As theaters have yet to fully reopen and draw film fans, studios have had to find other ways to release their movies and recoup investments. Independent filmmakers face increased budgets to meet new safety protocols and no insurance cover to protect from the losses if shoots shut down. That has opened the floodgates for deals to sell movies to streamers and for rich individuals in the U.S. and overseas to back film production.
"The pandemic and its negative impact on theatrical exhibition has certainly shifted the studio film financing marketplace," said Ken Deutsch, partner at Latham Watkins, who advised New Republic on its new slate deal. "A brand new set of risks has been introduced into the system - production delays, lack of insurance coverage, cost increases, theatre shutdowns, etc. And those risks impact all films, including what would have previously been considered 'sure bet' franchises. These risks have created new investment opportunities that were previously unavailable and are attracting new players."
Multi-picture financing deals like the one between Paramount and New Republic have waned in recent years. As the box office concentrated around fewer, bigger spinoffs and sequels, studios felt less need to bring in investors in order to keep all the profits from their movies.
But that may be changing, given uncertainty around the box office, entertainment industry attorneys and studio executives said.
"Having a portfolio approach to investing in motion pictures, where you own a few at 100% and you take on third-party investment with others, helps level out the ebbs and flows of performance," said Andrew Gumpert, chief operating officer for Paramount Pictures. "It would not be unreasonable to see studios and other production companies entering into similar multi-picture deals, especially when, in the current economic climate, investing in (film) assets could be appealing to third-party investors."
Multi-picture deals - sometimes called slate financings - have a mixed history in Hollywood. Some ended up in lawsuits after investors were left shouldering losses. More recently studios were able to find money and form strategic partnerships with Chinese companies that could help distribute their movies in the world's second-biggest box office. But political upheaval led to some of those deals falling away.