"Gangster Squad," starring Emma Stone and Ryan Gosling, is… (Wilson Webb / Warner Bros. )
Warner Bros. has extended a deal with its longtime partner Village Roadshow Pictures, which has secured debt financing of more than $1.1 billion to invest in upcoming movies like "The Great Gatsby," "Lego," and "Mad Max: Fury Road."
The agreement is a critical one for the Burbank studio, as Village Roadshow is one of two companies that put up half the budgets for most of Warner Bros.' productions.
Village, which has worked with Warner since 1997, will continue to do so through the end of 2017 under the new deal. A previous contract had been set to expire in 2014.
"This gives us the certainty we want and lets Warner Bros. know that over the next five years, its largest partners will remain at home," said Village Roadshow Chairman Bruce Berman.
The extension of the Village Roadshow partnership is the highest profile business deal that Warner has closed recently amid tension at the studio over who will become its leader next year when longtime chairman Barry Meyer retires. Three senior executives have been vying for the job, and rivalry among them has made it more difficult for some to conduct business with the studio.
"I have never seen a deal go more smoothly and with less friction than the one we just closed," said Berman, who was previously a president of production at Warner Bros.
The studio is unlikely to renew a deal with its other financing partner, Legendary Pictures, until the executive succession process is resolved, according to knowledgeable people not authorized to discuss the matter publicly.
Along with the new Warner Bros. deal, Village Roadshow has increased the size of the facility it uses to finance movies to $1.125 billion from $1 billion.
In the new financing agreement, the company was also able to significantly reduce the cost of its debt, said Greg Basser, chief executive of Village Roadshow Entertainment Group, the Australian parent company of Village Roadshow Pictures.
The Beverly Hills-based film unit co-financed only two movies this year and the same number in 2011. But under the new agreement, it plans to invest in between six and eight movies per year on Warner Bros.’ slate.
Other 2013 and 2014 movies it has committed to help make include the action/science-fiction film “All You Need Is Kill,” starring Tom Cruise, and “Gangster Squad,” starring Ryan Gosling and Sean Penn.
DreamWorks Animation shares fall after 'Rise of the Guardians' debut
Nintendo sells 400,000 Wii U units Thanksgiving week
Thanksgiving newcomers can't beat final 'Twilight,' 'Skyfall'
INTERACTIVE: TVs highest paid stars
QUIZ: Celebrity voice overs
PHOTOS: Hollywood back lot moments