Ready for their closeup: Hedge Funds go Hollywood

It’s not exactly news that ever since Hollywood was born , studio chiefs have been makers and breakers of careers, arbiters of taste and gatekeepers who decide which movies are made. But as Hollywood power shifts more to Wall Street investors, financiers are starting to bypass studio bosses by dealing directly with successful producers.

Now, instead of deals being cut over lunch at Spago or the Grill, movies are increasingly being greenlighted in conference calls to New York. The reason is a simple desire for more control. Wall Street financiers want a greater say over what movies they finance and who makes them; producers want more artistic independence and a larger share of the profits.
The studios themselves are nudging the trend along, too, since they are making fewer movies. A result for moviegoers is that they could begin to see even more thrillers, comedies and horror movies at the multiplex — the types of movies Wall Street likes, because of their more predictable payoff.

Joel Silver, the producer of the “Lethal Weapon” and “The Matrix” movies, is the latest and most important Hollywood figure to cut a big deal with Wall Street.

He has just joined forces with a consortium of financiers who have agreed to provide $220 million to produce 15 films over the next six years. Mr. Silver will not only have creative control, he will own the movies outright.

“I’ve spent 20 years working for studios,” Mr. Silver said in a recent interview beside an L-shaped azure swimming pool at his Brentwood mansion, a home he referred to as the house ‘The Matrix’ built. “It was always their call.”

To his new partners, Mr. Silver seems like a good bet. In more than two decades as a producer on the Warner Brothers lot, he has produced 46 movies, which have generated $5.6 billion in global ticket sales.

“Hedge funds are picking out who they want to be in business with,” said Rob Moore, president for worldwide marketing, distribution and home entertainment at Paramount Pictures, who gets calls weekly from producers lining up money. “They don’t claim to know how to make movies. They are investing in a track record.” But such investments are not risk-free, as others have learned.

http://www.nytimes.com/2006/10/14/business/media/14studio.html?_r=1&ref=business&oref=slogin