Skip navigation
MOST POPULAR RELATED TAGS
  • TOPICS
  • SECTORS
  • COMPANIES
Media Money Video Gallery
Sheryl Sandberg, who oversees all of Facebook's business development and sales, tells CNBC's Julia Boorstin what the com...
CNBC's Julia Boorstin looks at the weekend's box office and Twilight's gigantic "New Moon" opening. She also discusses C...
MEDIA MONEY INDEX
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...

MEDIA MONEY VIDEO GALLERY

» More

Current DateTime: 01:10:29 26 Nov 2009
LinksList Documentid: 31765984
Expiration DateTime: 11/26/2009 1:12:04 PM
    • A Facebook Christmas  24 Nov 2009

        Sheryl Sandberg, who oversees all of Facebook's business development and sales, tells CNBC's Julia Boorstin what the company has planned this Christmas.

    • Looking Left  23 Nov 2009

        CNBC's Julia Boorstin looks at the weekend's box office and Twilight's gigantic "New Moon" opening. She also discusses California's looming unemployment insurance crisis and a waiting list for pro football in Los Angeles.

    • Microsoft-Murdoch Scheme  23 Nov 2009

        Microsoft is reportedly talking to News Corp about teaming up on a search plan that would withhold content, including the Wall Street Journal, from Google, with Matthew Garrahan, Financial Times correspondent, and CNBC's Julia Boorstin & Bill Griffeth.

    • Inside Paramount Pictures  20 Nov 2009

        Discussing Viacom's Paramount Pictures strategy, with CNBC's Julia Boorstin and Brad Grey, Paramount Pictures.

    • Oprah Show to End in 2011  19 Nov 2009

        CNBC's Julia Boorstin has the details on Oprah Winfrey's decision not to renew her contract with CBS syndication.

    • Kids and Finances  13 Nov 2009

        A look at some of the stories of several inner city teens trying to become the business leaders of tomorrow, with CNBC's Julia Boorstin.

RSS FEED

» Help

Current DateTime: 01:10:30 26 Nov 2009
LinksList Documentid: 31625651

Media Money

Text Size
Jul.15
5:02 PM ET
Tuesday, 15 Jul 2008
Hollywood (Paramount For One) Is Feeling Credit Crunch

CNBC.com

The credit crunch is taking its toll on Hollywood. Deutsche Bank's $450 million film financing deal with Paramount Pictures, a division of Viacom[VIA  Loading...      ()   ] is falling through. The financing deal was meant to pay for up to 30 films, with Deutsche Bank proviing a 25 percent equity stake in each movie.

These are movies you've heard about, like the sequel to "Transformers" and "Star Trek" and many of them are already in production.

Now Deutsche Bank [DB  Loading...      ()   ]is closing its film financing unit, and it couldn't close its Paramount deal because it couldn't find adqueate investors to take on the senior debt level of the fund. These days potential lenders are avoiding asset classes that have less than that top triple-A rating. Can you blame them? But it's certainly a far cry from the crush of investors eager to pour money into Hollywood that we've seen in recent years.

These movies will still get made--Paramount will either find funds elsewhere, or will finance them entirely themselves, taking on more risk. These deals have been a great way for Paramount as well as other studios mitigate their risk, while also charging the investors a fee, making a bit of money on each investment. And will their be other investors? Probably. Right now Steven Spielberg is in talks with an Indian company to potentially help finance his next slate of movies. I wouldn't be surprised if the next spate of financing comes from overseas.

Why won't Paramount just make fewer movies? First of all, that's not the plan, and most of these films are already in the works. Second, Paramount has serious infrastructure it wants to make use of; and the numbers of executives, assistants, marketing flaks, is designed to support a certain number of films a year.

If all of a sudden it can't afford to make that number, it has lawyers or development execs who aren't working for a bit of time. And unless it's planning to overhaul its whole system, cutting the number of movies it aims to push through its pipeline every year, then it doesn't want to shake up its infrastructure.

For now, I'm looking out for a new financier, or financing option to swoop in. If not, I bet Paramount will take on the additional cost and bit of risk, itself.

Questions?  Comments? 

© 2009 CNBC, Inc. All Rights Reserved

Tools:
PrintEmailAdd This share icon
Next Post
  • digg share
ADD COMMENTS
Remaining characters


Current DateTime: 01:44:15 26 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 01:03:48 26 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 01:02:06 26 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 01:06:03 26 Nov 2009
LinksList Documentid: 29779198
  Data is a real-time snapshot  *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
A Division of NBC Universal
Thomson ReutersThomson Reuters