Merrill Lynch & Co. Inc. is going Hollywood, in a big way.
The global investment firm has laid out $1 billion to transform Summit Entertainment, Patrick Wachsberger’s foreign film agency, into a new studio that will produce, distribute and market films.
Robert Friedman, the former chief operating officer of Paramount Pictures, is helming the new venture with Wachsberger.
The mountain of cash will ostensibly remake Summit into a major player in the U.S. and global markets. A consortium of investors threw in for the $1 billion deal, which has been in the works since last summer, and will see a cut of the profits generated by the films. Summit plans to release 10 to 12 films annually in addition to handling foreign sales for its existing clients and will self-distribute its movies domestically.
The deal marks a departure from previous Hollywood investments made by equity firms in that it gives the backers a cut of the distribution returns.
“The real focus here is distribution, which is a good place to be,” Michael Blum, Merrill Lynch managing director, told Daily Variety.
A potentially prolific new studio is welcome news for Hollywood’s producers, filmmakers and actors, who have seen several of the major studios cut back on the number of films they are releasing.
A Finer Point
Los Angeles media management company Point.360 is in the process of selling off its advertising unit to DG FastChannel Inc., a firm the provides digital media services to the advertising, broadcast and publishing industries, for $34 million.
The purchase price excludes the assumption of about $7 million of Point.360’s outstanding debt and DG’s initial $5.3 million payment for Point.360 stock shares.
The company expects to close the transaction in the third quarter. Under the agreement Point.360 will spin off its post-production operations to shareholders, and DG FastChannel will integrate the company’s advertising distribution operations.
DG FastChannel will exchange each Point.360 share for about one-fifth of a share of DG FastChannel common stock, and expects to issue 2 million shares of its common stock under the deal. DG FastChannel owns about 1.6 million shares of Point.360 stock, about 16 percent of the outstanding shares.
On completion of the deal, Point.360 shareholders will receive one share of the post-production spin-off, dubbed New 360, for each Point.360 share held. The company plans to list shares of the post-production operation on the Nasdaq. Point.360’s existing senior management will continue to run the renamed New 360.
Bear Bopping
DMI Music & Media Solutions, a Pasadena audio branding company, has launched a music partnership with Build-A-Bear Workshop worldwide for original bear-themed tunes that play in the stores.
DMI will create the in-store audio elements for Build-A-Bear, including 12 original songs that are threaded throughout the daily music program that plays in more than 270 stuffed-animal retail outlets. The music, in pop, rock, country and Latin genres, is also available for download on the Build-A-Bear Workshop Web site.
DMI, now a decade old, has worked on audio for clients including 7-Up, General Mills, McDonald’s, Nestl & #233; Purina, Procter & Gamble, Subway, Target, Toyota, United Airlines and Victoria’s Secret. The company has a production music library of more than 25,000 songs.
Build-A-Bear hasn’t been hibernating. The company reported total revenue of $437 million in fiscal 2006.
Three’s Company
Hyperion Entertainment Group is backing a roll-up of three independent digital media service suppliers to the film and television industry.
The transaction combines Los Angeles-based Digital Dailies LLC, Sample Digital Media Services LLC and DAX Solutions, Inc. into a new entity designed to leverage the strengths of each company. The combined company is not yet named, but will provide studios, networks, and independent production companies with production workflow and media management tools, including secure digital dailies, content distribution, encoding services and customer support.
Digital Dailies and DAX currently supply both Web-based and set-top applications that create a secure online environment where producers, management, distribution and licensing partners can share information and content throughout a production or campaign lifecycle.
Staff reporter Anne Riley-Katz can be reached at (323) 549-5225, ext. 225, or at
[email protected]
