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This Just In: Financing Movies Not for Faint of Heart August 17, 2007

Posted by David Card in Media.

Oh wotta surprise. Wall Street doesn’t have the stomach for movie financing. Actually, it’s no surprise at all.

    Wall Street’s flirtation with Hollywood is showing signs of strain as the credit squeeze dents already waning enthusiasm for so-called slate-financing deals. Several funds set up to provide financing for movie studios are facing uncertainty, both in terms of underwriting existing deals and closing new ones.
    Flush with cash, Wall Street’s top-flight banks poured billions of dollars into financing groups, or slates, of movies in the past couple of years. But few are on track to make healthy returns, mostly because the studios only included their riskiest movies. Now, as the banks face a squeeze in the credit markets, Hollywood financing may prove to be a disposable form of high-risk funding.
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