Paramount Financing Loss: Crisis Or Not? (includes Paramount’s response…)
First there was yesterday’s unfolding story surrounding Paramount’s film financing deal-gone-south with Deutsche Bank. Then, last night, a rumor began swirling that Fox Filmed Entertainment was having a problem with Dune Entertainment’s $570 million financing of some 66 films over the next five years. Fox explains that Dune’s multi-billion dollar parent company Dune Capital LLC elected six weeks ago to close down one of its hedge funds and wire back the money to investors. That appears to have sparked the rumor that Dune Entertainment was in trouble. But Fox assures that Dune Capital’s three divisions act as separate entities. “The unit we deal with is not at all affected,” a Fox insider says.
Dune Entertainment, which seeks ownership of entertainment content, has had a long relationship with Fox Filmed Entertainment. For instance, Dune invested $325 million in 16 films back in 2006 after Fox scored its 5th consecutive record-breaking year. Dune Capital was launched in 2004 as a spin-off of Soros Capital Management when it restructured. The firm is led by three former Goldman Sachs guys. Interestingly, there’s a connection with Deutsche Bank because its star banker Laura Fazio helped broker two of the high-profile Fox-Dune Entertainment financing deals as well as the $1 billion Warner Bros-Legendary Pictures financing deal back when she was at Dresdner Kleinwort. After Paramount recently ditched Deutsche’s financing deal-in-the-works, Fazio was laid off and her film division shut down.