Franchise Financing South Africa

Peter Jacksonâ??s â??District 9â?² Crosses $200M; Sequel Only May Happen â??At Some Point

he alien apartheid film likely to snag one of the newly expanded 10 Best Picture Oscar nominations did it in worldwide box office this weekend — $115M domestic and $85M international so far (with China and Japan to come). And, remember, this indie prod’s negative cost was only $30M.  By the way, not only does QED Intl have dibs on the franchise, but Sony has first opportunity to lock down the sequel for their territories. Which is why Sony is pushing for a District 9 sequel since the studio is lacking in fresh franchises. But those close to producer Peter Jackson and director Neill Blomkamp say only it may happen “at some point” when the duo “figure out what the story is and organize their respective schedules”. (Peter is booked, and Neil is very much in demand now.)

Besides producer Peter Jackson and director Neill Blomkamp, the biggest beneficiary has been Bill Block’s QED Intl which was given first shot to finance foreign pre-sales. Block had to commit to fully financing the movie even before the American Film Market got underway. What a risk — because there was no star, no budget, no script. Only Peter Jackson’s name, which meant a lot in the marketplace. That enabled Block to organize the funding from Comerica back in 2007, well before the financial crsis. “I wonder if in the current climate those institutions wuld have stepped up,” one of my insiders questioned. “On the other hand, every time something like this happens, it makes indieprods more attractive to institutional financiers.”

district 9 dir prodSony’s Peter Schlessel acquired the pic from QED at AFM for domestic, UK, Australia, New Zealand, South Africa, Russia, Italy, Latin America, Korea, Hong Kong, China, and some other territories. Sony paid a $25M advance so the studio shares in the film’s profits. Also involved is Metropolitan Films, which has France. MGM acquired Spain, Germany, Benelux and Japan. But distributing for MGM is Sony in Spain, Germany and Benelux, and Warners for MGM in Japan. All the backend is shared with the partnership of QED, Jackson and Blomkamp. ”The good news is everybody in this wins,” an insider tells me. “It’s just one of these great stories where the movie came out of nowhere and has performed globally.”

The secret of the indie’s success, like Paranormal Activity, was that it was made outside the studio system and marketed outside the studio formula. The edgy and original content, the South African cast instead of Will or Adam or Brad, were thought to be integral aspects which the majors would have rejected during their own development process. ”Audiences are driving the agenda and deciding for themselves what they want to see through Twitter and social networking sites,” one insider explained to me. When District 9 was screened at Comicon, American Idol’s Jordan Sparks alerted 220,000 followers how good the pic was. That’s when the pic exploded in popularity. By the time it opened on a Friday, it was the #1 most tweeted topic. That followed the studio’s viral marketing campaign which for a year bore no Sony/Tri-Star logo on purpose so the pic wouldn’t have a big studio’s PR machine feel to it. (Thus, making audiences feel like they had organically discovered it.)

Meanwhile, here’s how the pic went down: Neill Blomkamp was supposed to be Peter Jackson’s helmer on Halo, which went down in flames. But Peter and his partner Fran Walsh kept Neill in New Zealand to develop his short film, Alive In Joburg. Jackson then turned it into a hard-cover faux graphic novel. That book went to Peter’s longtime manager Ken Kamins to arrange financing and set it up as a film. Ken made the decision to go indie, and hooked up with his former colleague Bill Block. That November 2007 at AFM, other studios kicked the tires but didn’t buy. Finally Sony picked up the domestic through Tri-Star.
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