Legendary, NBCU “Likely” For Big New Showbiz Partnership

EXCLUSIVE: I’ve learned that Legendary Entertainment‘s Thomas Tull could announce his selection of a new film/television financial, distribution, marketing, and production partnership as early as this week after kicking tires all over Hollywood. And insiders tell me that Comcast is his choice barring some last-minute over-the-top offer from a rival media giant. “NBCUniversal has been the likely candidate from the beginning. And it will likely happen momentarily,” one source tells me. The general concensus on both sides, according to insiders, is that “it would be a really good fit” because of Tull’s appetite for a so-called ‘360 media’ deal involving films, television, parks, and digital. Says another: “They’re in the end game. But Sony or another studio may still overpay – and that’s the problem.” I hear Tull, 43, and the Universal team already have a rapport. I reported last month that Tull had met twice with NBCUniversal chief and Comcast #2 Steve Burke over at NBCU. Then I reported that Legendary was adding Lionsgate to the mix of suitors NBCU, Sony, Fox, and Warner Bros. Now Tull would be wise to make the selection before Warner Bros opens his Pacific Rim next weekend because the $190M scifi actioner is tracking poorly – no better than mid-$30M for its 3-day opening. Also Legendary has big plans for Comic-Con this month. Meanwhile, Universal’s selection would cap a very profitable filmmaking year.

Few partnerships in recent memory have received as much advance publicity as this one especially considering that Legendary has very little IP to speak of and Tull isn’t a household name. But the studios want to be in business with Tull primarily for what films he will co-finance for them in order to minimize their risk. After building up his war chest and closing on $720M in financing in 2011 alone and more in 2012, Tull has access to billions more through various revolver accounts and other levers he can pull. He did $443M of pure equity with Waddell & Reed in a monster deal in December 2012. He has equity and financing for $272M. And he has a huge cash-rich business from his share of $7+ billion grosses worldwide at the box office and hit after hit after hit he co-financed at Warner Bros over the years, including Christopher Nolan’s Batman and Hangover trilogies. That’s a lot of leverage. Overall, Tull wants a much improved deal over the 10% distribution fees he’s paying Warner Bros for Legendary’s productions Pacific Rim and Godzilla. He’s seeking 8% for the 10 to 12 films Legendary will be fully financing. Plus he is keeping back certain rights for those movies like his own Netflix deals and his own producer deals. He also seeks more say in the development process through shooting, post-production, marketing and distribution.

Of course the deal itself will take months more of painstaking negotiations and my sources say the television part will be more complicated than the film end. But Tull always intended to make up his mind within 60 days. Even quicker since he’s known to push bankers and lawyers out of the room when he wants something. Tull in the studio meetings talked candidly about the “conflict of culture” between Legendary and Warner Bros in their 7-year film co-financing, co-production, and distribution relationship that ends this year. Tull repeatedly pledged to Hollywood that he wasn’t talking renewal with Warner Bros and definitely intended to move on – even though rival studios considered that just a negotiating ploy. Tull’s relationship with Warner Bros soured when its 50% stake in the pictures it co-financed dropped to 33% and then 25% for sure-thing The Dark Knight Rises. That created tension with movie mogul Jeff Robinov who has since left the studio. Meanwhile Warner Bros Television chief Bruce Rosenblum was pushed out and now works for Tull’s Legendary.

Tull still has several films coming out with Warner Bros including next weekend’s Pacific Rim (75% Legendary financed) and 2014’s Seventh Son (100% financed) and Godzilla (75% financed). Warner Bros without Legendary now will rely more on its straight financing partner Village Roadshow which recently was refinanced with more than $1B. And Warner Bros very publicly has been in the market for a slate deal.