Wall Street Banks Back Off Plans To Finance Films

from the no-motion-pictures dept

In the past year or so, there's been a surge of interest on Wall Street in financing Hollywood films. As the cost of making motion pictures continues to spiral higher, it makes sense that studios would look beyond its traditional networks to raise money. That being said, we had some hope that investment banks and hedge funds could be a positive force in the industry, since they'd likely be reluctant to write a blank check for some of the big budget, big star boondoggles that have characterized the industry of late. Well, it looks like we'll have to wait awhile before we learn how this plays out. The credit crunch has prompted Goldman Sachs and Deutsche Bank to postopone plans to raise $1 billion to fund films at MGM. The banks could still do the deal if they see a lot of investor demand for it, but that seems pretty unlikely in light of current conditions. Meanwhile, the Hollywood studios might have to make do with a bit less cash.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Raymond L, Aug 17th, 2007 @ 6:36am

    Plot

    Maybe they'll go back to making films with plots rather than special effects?

    Or is it just that people don't want plot any more?

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    Anonymous Coward, Aug 17th, 2007 @ 6:38am

    plot? whats a plot? i though movies were just a bunch of guys running around a green screen (with a little boob now and then)

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    Palmyra, Aug 17th, 2007 @ 6:59am

    The Hobbit has a plot.

    One of the films that could not get backing is Peter Jackson's The Hobbit. After the Lord of the Rings trilogy if Jackson can’t get backing I fear that the overall financial system is in deep trouble.

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    literate, sometimes, Aug 17th, 2007 @ 7:31am

    hey, joe, where you goin' with that O in your hand

    what's a "postopone"???

    is it related to a "cornpone"???

    maybe it's what my ex-boss suffers from...

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Anonymous of Course, Aug 17th, 2007 @ 7:38am

    More of the Same

    Hollywood on the whole seems to lack
    creativity not money.

    Hollywood isn't interested in making
    good movies, they're interested in
    making money. If a good movie is
    the result that's nice but it's not
    necessary.

    Hollywood has also become risk adverse.
    The movies they produce are insanely
    expensive. More of the same seems to
    work, so we get predictable flashy
    violence sequel six or a remake of
    To Kill A Mocking Bird.

    I think they could do both. Many
    smaller investments could yield as
    much return and would be more likely
    to produce good movies as well.

    I don't believe that money from bankers
    would help. I'd like to see more low
    budget movies and some experimentation.
    That would produce few flops to be sure
    and perhaps some real winners as well.

    And yes, good is subjective. I'd like
    more brain candy and less eye candy please.

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    Jezsik, Aug 17th, 2007 @ 7:48am

    Sorry to read this news

    I would have gladly invested in a fund that financed movies if that fund took an active role in keeping the costs under control. Years ago I read an article that detailed the return on investment from various producers. It pointed out how profitable Clint Eastwood was (he produced a very profitable movie on the same size budget that Robert Redford had for the costumes in The Natural).

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    Charles Griswold, Aug 17th, 2007 @ 2:35pm

    Re:

    plot? whats a plot? i though movies were just a bunch of guys running around a green screen (with a little boob now and then)
    The plot is the part that is CGI'd in later. You know, the scenery, the explosions, the actors, the extras, the boobs...

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    Andy McLean, Aug 17th, 2007 @ 2:57pm

    Just what Wall street needs, yet another area for the uninitiated to speculate and then loose their fannies.

    Then, when Hollywood becomes dependent on this foprm of financing and enough greedy suckers get burnt in the market, we can have a collapse, followed by (a brief) moment of sobriety in both the markets and Hollywood.

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Anonymous Coward, Aug 17th, 2007 @ 6:13pm

    Re: #8 - Andy McLean said it

    Perfect comment Andy.

     

    reply to this | link to this | view in thread ]

  10.  
    icon
    chris (profile), Aug 18th, 2007 @ 6:48am

    it's logical

    why not get wall street involved? hollywood has had show business and investment banking ass backwards for years.

     

    reply to this | link to this | view in thread ]

  11.  
    identicon
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    reply to this | link to this | view in thread ]


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