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Tom Cruise, Partners secure $500 million to fund UA films

August 17, 2007|Richard Verrier | Times Staff Writer

For actor Tom Cruise and his partners, getting half a billion dollars to finance films amid the ongoing credit crunch might seem like "Mission: Impossible."

But that didn't happen. United Artists, the storied film label that Cruise, producing partner Paula Wagner and Metro-Goldwyn-Mayer Inc. are reviving, said Thursday that it had secured the $500 million it had been seeking through Merrill Lynch to finance 15 to 18 films over the next five years.

Although the deal was widely expected, the financing from investors in the U.S., Europe, Asia and Africa comes amid a tightening credit market on Wall Street that has made some deals appear shaky. That has raised concerns that the crunch could affect Hollywood studios and production companies, which have relied heavily on financing from investment banks, private equity firms and hedge funds to help bankroll movies.

The announcement came nine months after MGM Chairman Harry Sloan struck a deal with Cruise and Wagner to return UA to its roots as an artist-driven production company. MGM owns 65% of the unit; the remainder is owned by Cruise and Wagner.

"The closing of this financing is an important milestone for the new United Artists," said Wagner, who is UA's chief executive. "It leaves us perfectly poised to realize our vision of making movies that are both important and commercial."

Sloan has said he wants UA to stand apart from MGM as an autonomous production unit, with its own film financing and bank credit lines.

UA's business plan calls for MGM to market and distribute at least four of the production firm's films a year.

Silent film icons Charlie Chaplin, Douglas Fairbanks, Mary Pickford and director D.W. Griffith formed the studio in 1919 as a way to give artists creative freedom and ownership in their films.

The Merrill Lynch financing is effective immediately and will cover two UA film projects already underway, including the November release of the Robert Redford-directed "Lions for Lambs," a political drama set in Afghanistan starring Cruise and Meryl Streep. The second film is "Valkyrie," a World War II thriller directed by Bryan Singer and also starring Cruise.

Separately, MGM disputed a news report that Goldman Sachs had withdrawn a commitment to underwrite a deal that would raise as much as $1 billion to finance the studio's films.

Company spokesman Jeff Pryor said MGM remained in discussion with Goldman Sachs and other banks but chose not to do a deal now, in part to focus on the UA deal.

A spokesman at Goldman Sachs declined to comment.

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richard.verrier@latimes.com

Times staff writer Josh Friedman contributed to this report.

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