Amid a drought for new outside money in the movie business, Warner Bros.' longtime co-financing partner Village Roadshow Pictures Group has restructured its $900-million facility that was set to expire in September, extending it to 2015 and increasing it modestly to $1 billion.
The increase in available production funds is good news for Village Roadshow, although it still falls far short of the amount in its earlier financing facility.
In the financial meltdown of 2008, Village Roadshow lost access to some of the funds in its then-$1.4-billion facility, and Warner Bros. had to step in to cover its portion. Village Roadshow ended up owing the Burbank studio $120 million for four pictures including "Get Smart," based on the 1960s TV comedy, and Clint Eastwood's "Gran Torino."
Last year it paid back Warner Bros. and managed to set up a $900-million bridge facility set to last only through this September.
Over the last few months, Greg Basser, chief executive of Village Roadshow's Australian corporate parent Village Roadshow Entertainment Group, worked with the company's existing lenders JPMorgan Chase & Co. and Rabobank, as well as with Bank of America Corp. and other institutional investors, to restructure the financing before it ended.
Village Roadshow's $1 billion consists of a $500-million revolving credit facility and $500 million in debt.
Meanwhile, the Wall Street money that poured into the movie business from 2005 to 2007 has largely dried up. The only other major film financing agreement to close since 2008 was a long-in-the-works $825-million deal for Steven Spielberg's re-launched DreamWorks Studios last year.
"I don't think there has been a thaw in the market yet," Basser said. "This is more a reflection of who we are than the general economic times."
Village Roadshow has co-financed 61 movies with Warner Bros. since 1997 and just four films with other studios. Some of the new funds are already dedicated to several Warner movies, such as this weekend's "Sex and the City 2" and upcoming sequels to "Sherlock Holmes" and the animated hit "Happy Feet."
"It's great to be given the opportunity to go another 10 or 12 years with Warner Bros.," said Bruce Berman, chairman of Village Roadshow Pictures.