08-Aug-2019 • No Time To Die
Annapurna, who formed a partnership with MGM to distribute the 25th James Bond film in North America, is reportedly eyeing bankruptcy protection.
"Does it look like we need the money?" Yes. Yes, it does.
Multiple sources tell The Hollywood Reporter that Annapurna has retained a law firm to explore bankruptcy protection. In the USA, filing for Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor's business affairs, debts, and assets. It is commonly used by companies to shed debt.
The eight-year-old studio is run by Megan Ellison, daughter of Oracle Corporation billionaire Larry Ellison. It has suffered a string of financial failures at the box-office. The studio has recently scrapped two major films that were previously green-lit.
The company has reportedly burned through $350m of funding it secured in late 2017, from banks where Larry Ellison has $1 billion credit lines. Sources told Deadline that Annapurna has either defaulted or is about to default on that debt. A deadline has been set by lenders for this week to come to a solution. The trade blog speculates that the bank expected 'billionaire dad' will come to the rescue and bail out his daughter's company, but the banks have set a deadline of next week. Other reports indicate that Larry will offer his daughter's debt owners 80 cents on the dollar.
Following the press stories today, Ellison issued a memo to staff to quell any concerns but did not categorically deny the details of the story.
When MGM emerged from bankruptcy in recent years, they were stripped of their distribution arm. After MGM had wasted an entire year flirting with Chinese investors, it was announced that MGM would partner with Annapurna to distribute the film in North America (Universal was later named as the worldwide distributor).
Rumours circulated that MGM, proud of their Bond heritage and 50% ownership of the franchise, did not want Annapurna's name anywhere near the film, despite being in partnership to distribute. A compromise was found when the old United Artists brand was resurrected. MGM and Annapurna are equal partners on the new UA, the label under which Bond 25 will be released in the USA and Canada.
Bond has struggled to release films routinely over the past 20 years largely due to MGM's financial mismanagement. This latest blow is somewhat ironic, as it is not MGM this time that may be causing headaches for 007's distribution.
MGM was quick to comment to the trades that whatever moves Annapurna makes, it will not affect the release of Bond 25 in North America. That is hard to swallow considering a 50% stake of the operation may be held by a company heading into Chapter 11.
The common-sense action would be to have Universal take sole control over worldwide distribution for an additional percentage of the North American box-office. This is the deal that MGM struck with Sony to release the first four Daniel Craig films.
But, common sense and business acumen are in short supply when it comes to Bond's American financial partners.