Brian in Mesa

Paramount Signs Marvel Movie Deal
Source: Marvel Enterprises, Inc.
April 28, 2005

Marvel Enterprises, Inc. and Paramount Pictures, a part of the entertainment operations of Viacom, Inc. announced that they have entered into an agreement under which Paramount will distribute a slate of feature films to be produced by Marvel. Marvel also announced a new, non-recourse financing facility to be provided by Merrill Lynch Commercial Finance Corp. that will allow the company to produce its own slate of feature films based on its renowned comic book characters.

"We are excited to be building our own film slate, and to be doing so using non-recourse financing," said Avi Arad, Chairman and CEO, Marvel Studios. "Paramount Pictures has the most collaborative and creative team in the business to help us market our films. Under its new leadership, we've found Paramount to be exceptional in every way and look forward to working together for a long, long time."

"Marvel has become a marquee entertainment brand," said Brad Grey, Chairman and CEO of Paramount Pictures. "It speaks to Marvel's strength in the marketplace and the great popularity of its brand and characters that Marvel can obtain such innovative financing for its film slate. We are thrilled to partner with them in this new venture."

Marvel has obtained a financing commitment from Merrill Lynch Commercial Finance Corp. for a $525 million non-recourse revolving credit facility over seven years to permit Marvel to fund the production of its film slate. The facility will be secured by the theatrical and motion picture production and distribution rights for ten Marvel characters. The non-recourse element of the structure limits Marvel's cash risk to un-reimbursed development costs and general incremental overhead.

Marvel expects that producing its own slate of films will permit it to obtain greater participation in all revenue streams related to its films and the opportunity to begin building its own film library. The finance structure will also allow Marvel to receive a producer fee for each film and retain all merchandising revenues. Paramount will receive a distribution fee for each film it distributes and will retain worldwide distribution rights in sequels to the films covered under the agreement.

The distribution agreement between Paramount and Marvel specifies that Marvel may deliver up to ten films to Paramount over an eight-year period, with the first titles including Captain America and Nick Fury. Marvel's budgets for each film may range from $45 million to $180 million. The first picture is expected to be released in 2007 or 2008. Paramount will not contribute to production costs, although it will provide advance funding of promotion and advertising for the films.

Marvel's financing is subject to numerous contingencies, including the negotiation of definitive financing and distribution agreements. There is no assurance that the financing will be completed.

Relativity Management, Inc. assisted Marvel with the structuring of the financing.

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Woohoo !!



:geek:

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Chaplin

Too bad Paramount is a horrible movie studio--I thought Marvel was doing just fine with Sony.

mdamien13

Why would they remake Captain America when Albert Pyun has already directed the ultimate Captain America film!?!?!?

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The Lonely Ones - available on DVD at all online retailers and Fry's Electronics everywhere! Check out the film's MySpace page for reviews and interviews with the cast and crew!

Brian in Mesa

Marvel Launches Independent Film Slate
Source: Marvel Entertainment, Inc.
September 5, 2005

Marvel Enterprises, Inc. announced today the completion of a $525 million non-recourse debt facility which will finance Marvel's production of up to ten films based on characters from its famous stable of comic book characters, including Captain America, Nick Fury and The Avengers. Paramount, a unit of Viacom, Inc., will distribute the film slate, with the first theatrical release expected for summer 2008. This transforming arrangement gives Marvel complete creative control, the ability to build a film library and greater profit potential than it has received from films licensed to other studios. To reflect this major expansion of its Hollywood presence, Marvel will change its name to "Marvel Entertainment, Inc."

These film production activities, to be carried out by subsidiaries of Marvel Studios, Inc., will complement existing and future film projects licensed to other studios. Marvel has a strong track record of working closely on Marvel character-based films it has licensed to other studios, such as Sony Pictures, 20th Century Fox, New Line Cinema, Universal Studios, and Lions Gate Entertainment. In 2006, Marvel anticipates the release of Ghost Rider, X-Men III and Punisher II through Sony, Fox and Lions Gate, respectively.

The seven-year, $525 million facility was arranged by Merrill Lynch, Pierce, Fenner & Smith Inc. and consists of $465 million in revolving senior bank debt and $60 million in mezzanine debt. Both S&P and Moody's have given the senior bank debt an investment grade rating. In addition, Ambac Assurance Corporation has insured the senior debt, raising its rating to AAA. MVL Film Finance LLC, a special purpose, bankruptcy-remote subsidiary of Marvel, will be the borrower under the facility. That subsidiary has pledged the theatrical film rights to the ten characters included in the film slate as collateral for the borrowings. The borrowings are non-recourse to Marvel Enterprises, Inc. and its other affiliates.

Avi Arad, Chairman and CEO of Marvel Studios, commented: "The film slate financing enables us to evolve our entertainment operations into film production, an area where we have experienced past success with our partners and which offers significant profit potential for our company. The characters involved are some of the most valuable in the Marvel Universe, and we are excited to launch them as consumer brands via feature film releases under our direction. We look forward to working with Brad Grey and the exceptional team he has put together at Paramount and are confident that this will be a successful venture for us both."

Brad Grey, Chairman and CEO of Paramount Pictures, commented: "Marvel has emerged as one of the strongest, most successful entertainment brands around the globe, with an enviable track record in feature films. We are excited to be working with Marvel on this new business."

"Merrill Lynch is pleased to have worked with Marvel in structuring and arranging this innovative and unique financing," said Michael Blum, head of global structured finance at Merrill Lynch. "Obtaining a vast majority of financing at the AAA rating level backed by the intellectual property value of ten Marvel characters plus the movies created by Avi and his team is at the cutting edge of entertainment structured finance techniques."

Funds under the facility will be used for the production of films. Marvel will receive a gross participation on all revenues from the facility as the producer of each film and will retain all of the film-related merchandising revenues. These merchandising revenues and the gross participation are neither pledged as collateral nor subject to any cash restrictions under the facility. Marvel will also receive all profits, including all revenue streams (including box office receipts, DVD/VHS sales, television, and soundtrack sales) after film costs, distribution fees, marketing, principal repayment, and interest. In addition, Marvel will have the ability to build its own film library through this initiative.

Marvel's distribution agreement with Paramount guarantees distribution for 10 films and encompasses two prime release periods each year - the spring/summer and fall/holiday seasons. Paramount has guaranteed Marvel wide distribution with commensurate advertising and marketing efforts. This is a worldwide arrangement with the exception of Japan, Germany, Australia/New Zealand, Spain and France, which Marvel will sell directly.

The ten Marvel characters in the arrangement are Captain America, The Avengers, Nick Fury, Black Panther, Ant-Man, Cloak & Dagger, Dr. Strange, Hawkeye, Power Pack and Shang-Chi. Each film is expected to have a budget of up to $165 million dollars and a rating no more restrictive than PG-13. Although the financing allows for the production of animated films, Marvel currently intends to use the financing to make only live-action films.

Marvel will fund initial development including scripts for each production. Once a film is "green lit" (approved for production), the facility will reimburse Marvel for these costs. Marvel Studios will oversee the slate and has sole green light control. Unreimbursed overhead expenses and any unreimbursed development costs represent Marvel's only direct financial risk. The operating results for the film slate will be consolidated with those of Marvel and separate segment disclosure will be provided in Marvel's periodic financial reporting. However, there are restrictions on the cash generated by the films that will prevent Marvel from withdrawing any profits until after the release of the third film, and then only if financial tests are met. As is consistent with Generally Accepted Accounting Principles, the costs of each film will be capitalized until theatrical release.

Relativity Media LLC assisted Marvel with the structuring of the financing.

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HONEY BADGER DON'T CARE

Pariah

Captain America has the potential to be a GREAT film franchise, IMO.

DjaugheOld

wtf...ant man?!

Well on the brightside my Powerpack issues should finally be worth something!

Pariah

Yeah, you can sell them to a 10 year old kid for a nickel.

(I have some, too. They're actually pretty good.)

EDIT: "Kind" was supposed to be "kid."

DjaugheOld

lol...actually I would expect at least a dime...my collection was signed by the writer.

Pariah

Did Louise Simonson do those? That's pretty cool.

I haven't looked at them in years and years, but I remeber as a kid being pleasantly surprised at how good it was.

DjaugheOld

Yeah she did....apparently (or so she claimed) to have used her coworkers kids (and her daughter) as the inspiration...

Pariah

Yer lucky you put this little disclaimer in there...

Warlordaz

Well ... Marvel's only deal with Sony was for the Spiderman series ... most of their stuff actually runs through Fox. They have a couple of things elsewhere like the Blade series was New Line, more because Wesley Snipes has pull there than not.

Black Panther has been a Snipes vehicle in the wings for over ten years but I think The Rock (Dwayne Johnson) could pull it off easily.

Iron Man has been a secret desire of Tom Cruise's for many years but there are cheaper people who could pull it off without as many demands because special effects will need to be well done for that.

Shang-Chi has Jet Li written all over it. The Avengers will the most difficult: are you going to get Dolph Lundgren to play Thor? If not him, who?

Who will play Captain America?

I could care less about Ant-Man really but who is going to be Pym? Such a convulted character would need an actor with depth and a soul.

Doc Strange will have the Religious Right all over him unless you market more like Harry Potter (Harry is actually very good for Doc as it is... makes magic more acceptable to the masses)

Pariah

I think fans (and Marvel) might demand that the Black Panther actually be black.

It must be REALLY secret because Cruise recently said he didn't want to do it.

You could get any big nordic guy to play thor, IMO.

I've alsways thought Matt Damon would make an exellent captain america.

Instead, you'll probably get a comedian, since it's going to be a comedy.

I don't think every movie about magic is going to cause an uproar. The reason Harry Potter has become an object of scorn for the religious right is because A) it's aimed at kids B) it's so widly popular and there is so much ancillary material associated with it that's made to make it seem more real (much like all of the stuff that goes along with the Lord of the Rings stuff).

Warlordaz

I haven't heard anything about Cruise denouncing his interest in Iron Man yet .... he's wanted the film since the early 90's

In regards to Ant-Man, if you really knew the tragic story of Hank Pym you wouldn't be saying it is a comedy.... Do I think it will do well? ... Now I'm laughing...