News Corp. (NWSA:US)’s Twentieth Century Fox raised $400 million for film production, including the next “Avatar,” through former Dune Capital LLC executive Chip Seelig, two people with knowledge of the situation said.
Seelig’s fund will invest in most Fox-produced films over the next five years, said the people, who requested anonymity because details haven’t been made public. Investors in the fund include Magnetar Capital LLC, an Evanston, Illinois-based asset management company, one person said.
The accord ensures Fox has capital for moviemaking and allows the studio to reduce its financial risk by taking in investors. The company’s previous agreement with Dune Capital expired at the end of 2012. As with the Dune agreement, some new films will be excluded from the deal, including the “Ice Age” animated movies, one of the people said.
Seelig didn’t respond to an e-mail request for comment. Chris Petrikin, a Fox spokesman, also declined to comment. The publication Variety reported on the arrangement yesterday.
Films in development at Los Angeles-based Fox include “The Secret Life of Walter Mitty,” based on the James Thurber short story, and “A Good Day to Die Hard,” a picture that continues the Bruce Willis action series.
Dune Capital, based in New York, will continue to collect revenue from earlier investments in Fox films, including the original “Avatar,” the James Cameron picture that became the highest-grossing film in history with $2.8 billion in worldwide ticket sales, according to Box Office Mojo.
Major studios rely on outside financing to reduce risks on larger-budget, summer films that routinely cost $150 million or more. Time Warner Inc.’s Warner Bros. jointly produces many of its films with Legendary Entertainment and Village Roadshow Ltd. (VRL)
For the first “Avatar,” Fox shared the $300 million production cost with Dune and London-based Ingenious Media Holdings Plc. The film was projected to yield $1 billion in profit for the participants, including revenue from home-video and television sales, people familiar with the movie’s financial performance said near the end of its theatrical run.
News Corp. gained 0.4 percent to $27.90 at 3:30 p.m. in New York. As of yesterday, Class A shares of the New York-based company had gained 8.9 percent this year.
To contact the reporter on this story: Michael White in Los Angeles at firstname.lastname@example.org
To contact the editor responsible for this story: Anthony Palazzo at email@example.com