- Facebook's Biggest-Ever Holiday Shopping Season
- Facebook's New Dual Class Structure - Slow Steps to an IPO
- Can Murdoch Help Bing Challenge Google and Shift the Content Equation?
- Twilight, Inc., A Worldwide Craze
- Oprah to Leave Syndication in 2011
- Sony's E-Reader Shortage and the Digital Book Battle
- Salesforce.com Brings Facebook and Twitter's Social Capabilities to Businesses
- Sumner Redstone's Companies Face Off Yet Again
- Can YouTube Revolutionize Citizen Journalism?
- What MGM's Sale Could Say About Value of Content
More Videos
- Facebook's Biggest-Ever Holiday Shopping Season
- Facebook's New Dual Class Structure - Slow Steps to an IPO
- Can Murdoch Help Bing Challenge Google and Shift the Content Equation?
- Twilight, Inc., A Worldwide Craze
- Oprah to Leave Syndication in 2011
- Sony's E-Reader Shortage and the Digital Book Battle
- Salesforce.com Brings Facebook and Twitter's Social Capabilities to Businesses
- Sumner Redstone's Companies Face Off Yet Again
- Can YouTube Revolutionize Citizen Journalism?
- What MGM's Sale Could Say About Value of Content
RSS FEED
MOST SHARED
- Kuoni CEO Sees Recovery in Travel Sector
- Dubai Struggles to Ease Debt Fears; Investors Rattled
- Gold Retreats from Record High as Dollar Rebounds
- China Unveils Carbon Target Ahead of Copenhagen
- Euro Shares Record Biggest Drop in 7 Months
- Hyundai-Kia Targets Rapid China Growth in 2010
- Fannie Mae to Tighten Lending Standards: Report
- Great Britain, No Longer That Great: Investor
- US Markets Bracing for Selloff On Worries About Dubai's Debt
- UK's Darling to Downgrade 2009 Growth Forecast
- 4 Thanksgiving Week Buys For Your Portfolio: Market Pros
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Revenge of the Gangsta Nerds
- Will TCU See The "Flutie Effect?"
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
- US Markets Bracing for Selloff on Dubai Debt Worries
- US Dollar Falls to 14-Year Low Against the Yen
- No Thanksgiving Rest for Retailers in Sales Race
- UK's Darling to Downgrade 2009 Growth Forecast
- US Companies Already Moving on Curbing Emissions
- Fannie Mae to Tighten Lending Standards: Report
- Investing in Good Karma – and Making a Profit
- Retailers Should Believe in Christmas Miracles
- Bankruptcies Jump, Hitting Highest Level in Four Years
Media Money
Text Size 
 |
CNBC.com |
The most notable asset Relativity is acquiring is Rogue's library of about 30 films, which can be monetized though DVD sales, TV rights (on the likes of HBO), and now digital distribution. Rogue is known for what Hollywood calls "genre" films, horror films aimed at moviegoers 25 and under, made with a relatively low budget.
The division's valuation was calculated based on the performance of the library so far, and the expectations for upcoming library titles. For instance, "The Strangers" a hit horror film this summer, grossing $53 million at the US box office on a reportedly $9 million budget, should bring in about $20 million from the HBO sale alone.
Another asset Relativity acquires; the roughly 30 projects Rogue has in development, including a sequel to hit "Strangers" and whatever projects emerge from a producing deal with Wes Craven (the "Scream" series) and his production arm. This Friday Rogue opens "The Unborn," from producer Michael Bay.
Here's what Universal gets: a chunk of cash now, plus the rights to release Rogue movies (without having to take the risk of investing in developing or financing them) for a distribution fee of 10 percent of revenues. Relativity is backed by New York-based hedge fund Elliott Associates, which just this September invested another $1 billion into Relativity, giving Relativity about $2 billion n cash on its balance sheet.
The two companies have been working together for years now; in September Relativity struck a deal to effective co-finance Universal's slate through 2015. A few years earlier the two made a deal in which Relativity paid for half the cost of a slate of movies including hits "Mamma Mia!" and money-losers like "The Kingdom."
I think it's remarkable that any such deals are getting done in Hollywood right now. It's certainly a convenient infusion of cash as Universal faces some new costs, including its new distribution deal with Steven Spielberg's DreamWorks [DWA
Loading...
()
] . In terms of Relativity's end of the bargain, my only question is about the value of the development slate.
Rogue's president left the studio a few months ago, when these negotiations were heating up, and the company is tiny, with just a handful of execs. Without the production shingle's top dog, and if employees keep leaving, is a development slate worth the same amount without the folks who developed it? We will see!
GE [GE
Loading...
()
] is the parent company of Universal and CNBC.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes