London-based Ingenious Media, the private equity fund which backed Twentieth Century Fox’s Avatar, has struck a deal with Fox Searchlight to make between 2 to 3 movies in the $10M-15M range. Ingenious could inject up to $14 million annually into the deal, providing 20%-30% equity per movie. Fox Searchlight will guarantee U.S. distribution, the Holy Grail for most UK indie producers. Both companies worked together most recently on 127 Hours, Never Let Me Go, and the forthcoming The Best Exotic Marigold Hotel, which Fox Searchlight will release in the Fall. Ingenious has backed more than 30 Fox movies but until now under a loose arrangement, financing between 5 and 10 of Fox Filmed Entertainment’s movies each year. Recent investments include Gulliver’s Travels, Unstoppable, The A-Team, and Percy Jackson.
James Clayton, CEO of Ingenious Investments, tells me he first approached Fox Searchlight presidents Steve Gilula and Nancy Utley and production president Claudia Lewis back in November about formalising their relationship. “The UK independent sector has been going through a very tough time I told them I think there’s something more ambitious we can do in the UK. Given our position, we get to see pretty much every UK project in development. And Fox Searchlight wanted to make a greater commitment to the UK business.” The new deal, notes Clayton, takes advantage of “Fox Searchlight’s great taste, superb marketing and the economics of global distribution [which] are much more interesting from a financing perspective than piecemeal independent financing. Hopefully producers will see it that way too. After the demise of the UK Film Council, here’s another option. The independent sector could really do with a boost.”
Ingenious Media was one of the key backers of global blockbuster Avatar along with American private equity firm Dune Entertainment: together they put up 60% of the film’s massive budget for their most profitable film investment to date. The man behind Ingenious, Patrick McKenna who founded it in 1998, is a former boss of Andrew Lloyd Webber’s Really Useful Group theatre firm and chairman of The Young Vic Theatre. Ingenious is also close to other Brit producers including Matthew Vaughn, having co-financed X Men: First Class with Fox, and Ruby Films (The Other Boleyn Girl). “Any new and additional portal for financing UK productions is good news,” Ruby Films executive producer Paul Trijbits tells me. “Both Fox Searchlight and Ingenious have been strong supporters of British talent. This partnership looks like a natural extension of what they have been doing on a more ad hoc basis.”
British producers welcome the Fox Searchlight/Ingenious tie-up as it gives them another place to get a movie into production apart from Working Title, Pathe and Studio Canal/Optimum. But Hollywood’s recent history of production deals with Brit filmmakers has not been happy. Fox Searchlight’s joint venture with DNA Films (Never Let Me Go) was not renewed, while Sony’s deal with Matthew Vaughn’s Marv Films and Disney’s Harbour Pictures deal (Calendar Girls) also fizzled out. The usual reason is that, once past the press release, neither side can agree on which films to make.