After canceling a stock offering and failing to raise private equity, independent studio the Film Department is shutting down.
Headed by former Warner Bros. and Miramax Films executive Mark Gill, the Film Department saw only one of its movies released in the U.S. since launching in 2007: the Jamie Foxx-Gerard Butler thriller "Law Abiding Citizen." That picture was released by Overture Films in 2009 and grossed a solid $72 million. The Film Department produced only two other movies, both romantic comedies. "A Little Bit of Heaven," starring Kate Hudson, has yet to be released. "The Rebound," starring Catherine Zeta-Jones, has been distributed abroad but not in the U.S.
"A Little Bit of Heaven" was shot last year for $16 million, and Gill said he still hopes to strike a distribution deal with another company. However, "The Rebound," which was made in 2008, may prove to be more challenging because it was already released in most foreign countries. As a result, Gill admitted that finding a domestic theatrical distributor will be difficult. As a result, the film may have to go directly to DVD and digital platforms.
Founded at the height of the boom in independent movie financing, the Film Department quickly ran into financial problems and never came close to its goal of funding up to six pictures per year. By early 2010, laden with debt and having lost $34 million, the company filed for an $85-million initial public stock offering and said it would begin distributing its own pictures. But despite reducing the amount of money it sought to raise to $69 million and then again to $30 million, the company in August scrapped the IPO plans and tried to raise $200 million in private debt and equity financing.
At the time, both Gill and Chief Operating Officer Neal Sacker, a former Miramax and Warner colleague, said they were in talks with private investors to raise that money.
"We had four occasions where we got near the end, but it didn't close because the capital wasn't available or the investors decided they didn't like the movie business," Gill said in an interview Thursday.
The company was profitable in 2010 based on revenue from "Law Abiding Citizen," but all of the proceeds were used to pay off debt, he said.
The Beverly Hills firm, which has 11 remaining employees, will close its doors May 27.