Groundswell of Cash
Variety reported today on Beverly Hills-based Groundswell Productions, producer Michael London's film fund financed production and financing company aiming for five pics per year under $20 million each.
"Groundswell launches with an initial capitalization of $55 million and is in the midst of additional fund-raising with a target of $100 million over the next six months courtesy of Beverly Hills-based Lexington Film Funding and New York-based Crescendo Independent Film Fund."London, who previously had a first look deal with Paramount, has demonstrated his producing accumen, with "Sideways" grossing $110 million worldwide against a $17 million budget and "The Family Stone," with a budget of $17.5 million has grossed $90 million worldwide.
While it is unclear whether Lexington Film Funding is managed by Lexington Venutres or is a part of Lexington Entertainment Group, both companies are owned by Lou Gonda, a billionaire who made his money at International Lease Finance with aircraft leasing (see this May 2000 LA Business Journal article).
The LA Times sums up the significance of this next influx in a stream of cash currently flowing into Hollywood,
"No matter how unpredictable the movie business can be, private investors are drawn to it like moths to flame."And, more importantly, the expectation of profit from investing in "smaller movies" is illustrated by participant Harvey Gettleson, chief operating officer of Gonda's Lexington Ventures, who
"said that by controlling costs, he expected to average $20 million to $25 million in profit per film over a slate of movies once all the revenue streams, including home video and TV sales, were factored in."