Munich (dpa) – If you can’t beat ’em, join ’em. This could be the slogan for
Germany’s independent film companies, which, flush with fresh funds from
Frankfurt’s Neue Markt stock exchange, are on a roll in forming
co-production and co-financing deals with Hollywood.
Tinseltown’s special effects and star-studded blockbusters perennially
dominate 80 per cent of Germany’s film and television market, the world’s
second largest for feature films and TV movies.
German producers have been handicapped in coping with the majors, with
funding limited to limited film support systems, while banks were reluctant
to finance risky film projects.
Over three years ago, the Neue Markt was launched for small and medium-sized
companies not qualified for the Dax, Germany’s big board. The new exchange
opened up possibilities for media companies to obtain new sources of
financing for film projects and rights acquisitions.
The Munich entertainment group, EM TV and Merchandising, was one of the
first to go on the Neue Markt, whose shares rose from an initial public
offering of 18.30 dollars in September, 1997, by a mind-boggling 20,789 per
cent.
EM TV capped a number of company buy- ins and rights acquisition deals with
purchase of last February with the Jim Henson “Muppets” Company for 680
million dollars. Taking a cue from EM TV, German film companies scrambled to
go public on the Frankfurt exchange, most of them successfully.
One of the first to court Hollywood’s majors was producer Bernd Eichinger’s
Constantin Film AG, which had set up an office in Los Angeles. After going
public in last September, Constantin concluded a “first look” and
cofinancing deal with Key Entertainment in Los Angeles for development of
feature films and TV movies. Constantin also clinched a similar deal with
the American independent producer, Escape Artists.
Also among the first to hop on the Hollywood bandwagon were the distribution
and production companies Senator Film AG in Berlin and the Munich-based
Kinowelt.
Senator founded a new production company, Amberlon Pictures with former
United Artists president Erich Pleskow and Dutch media manager Leon de
Winter. Senator’s chief Hanno Huth also pulled off a deal at the recently
ended Cannes Film Festival for the world rights, outside of North America,
to six Julia Roberts movies. Kinowelt is cooperating with American
independent producer Gale Anne Hurd in various production projects, and has
acquired a 26 per cent in the Canadian production company, Alliance
Atlantis.
Werner Koenig, head and co-owner of the Munich-based Helcon International
Pictures, was instrumental in production of the spoof “2001 – a Space
Travesty”, set for release in October, toplining coproducer Leslie Nielsen,
whose “Naked Gun” movies captured the fancy of German film fans. Koenig and
his partner Martin Heldmann have also taken over a 19 per cent stake in film
financier, Newmarket Capital.
After its market launch last September, the Munich rights trader Splendid
Medien AG acquired 49 per cent of the American group, Initial Entertainment,
and put up 65 million dollars for production of director Martin Scorsese’s
“Gangs of New York”, with “Titanic” star Leonard DiCaprio in the leading
role. Splendid also has high hopes for its financial participation in
“Traffic” with Michael Douglas and “Altar boys” starring Jodie Foster.
Another Munich rights company Advanced Medien AG has founded a production
company with director Wolfgang Petersen, whose credits include the
successful “Air Force One” and “Das Boot”.
Advanced also took a 51 per cent in the United Film Organization UFO, an
American special effects company producing science fiction and action films.
Datty Ruth, VCL Communications, a top ranked video company, is committed to
a 25 per cent financial commitment for planned sequels to Carolco’s action
films “Terminator 2” and “Terminator 3”.
And Ruth’s VCL Film and Medien AG, has entered into an agreement with
Francis Copola’s American Zoetrope, for coproduction of ten feature films,
whose budgets will run to about ten million dollars.
German producers and their American partners hope to obtain such stars as
Hugh Grant, Jenifer Lopez or Mel Gibson, to heighten their chances in the
highly-competitive international markets. But big names do not always work
in the box office, as witnessed by the number of Hollywood flops in the
past, despite top casting.
The Johnny-come-latelies on the stock exchange constantly make announcements
of new and potentially lucrative deals to lure new shareholders and retain
old. But many analysts warn that unless they show investors postive results
within the next year or two, the euphoria in the Neue Markt could rapidly
disappear. So far, however, the newcomers have been more than holding their
own on the market.
