Wall Street may be ready to show Tom Cruise the money.
Metro-Goldwyn-Mayer Inc.'s long dormant United Artists movie unit -- which Cruise and his producing partner are attempting to resuscitate -- is close to raising about $500 million to finance a slate of movies over the next few years.
The money would pay the cost of making prints of the films and advertising them, as well as the cost of making them.
People close to the talks cautioned that the deal with expected lead investment bank Merrill Lynch wasn't final, and that terms were still being negotiated. They said an agreement could take an additional 10 days to two weeks to complete.
"We expect to announce full funding for UA shortly," MGM Chairman Harry Sloan said in an interview. He declined to elaborate.
Sloan struck a deal in November with Cruise and longtime associate Paula Wagner to try to return the UA label to its historical roots as an artist-driven production company in which actors, screenwriters, directors and producers are free to make movies outside the more restrictive studio system. The agreement came two months after Cruise and Wagner were cut loose by Paramount Pictures, where for more than a decade they enjoyed one of the most lucrative production deals in the business.
Sloan's plan to use a star of Cruise's stature to revive UA harked back to the studio's founding in 1919. Silent film icons Charlie Chaplin, Douglas Fairbanks, Mary Pickford and director D.W. Griffith formed the studio as a way to give artists creative freedom and ownership in their films.
If Sloan makes a deal to raise the money, UA would become the latest in a long line of Hollywood production companies and studios to tap Wall Street financing to help bankroll their annual output of movies.
This trend, accounting for billions of dollars in recent years, has occurred as stars and filmmakers are being squeezed by studios intent on slashing production and marketing costs. As a result, much of the financing from investment banks, private equity firms and hedge funds is going into the projects of Hollywood's most bankable talent, providing significant autonomy to those players.
In the UA deal, Merrill Lynch is expected to enlist other banks to supply some of the financing, a combination of equity and debt. In recent years, the investment bank has been active in backing slates of movies by other studios and independent producers including Paramount Pictures, Marvel Entertainment and Montecito Picture Co., headed by director Ivan Reitman and former Universal Pictures Chairman Tom Pollock.
