Marvel Enterprises, Inc. announced the completion of a $525 million non-recourse debt facility to finance a slate of up to ten live action films with budgets ranging from $50 to $165 million -- and the company has changed its name from Marvel Enterprises to Marvel Entertainment to reflect its larger than ever stake in Hollywood. As ICv2 reported last April (see 'Marvel to Produce Its Own Films') Marvel will have near total control over the filmmaking process with Paramount handling distribution and marketing for a fee -- a setup that is similar to Lucasfilm's deal with Fox for the Star Wars movies. Marvel will pay for all development costs up to the point at which the film is 'green lit' at which time Marvel will be reimbursed from the financing fund for all developmental costs. Marvel could be stuck with the costs of projects that never make it before the cameras (although Marvel alone has the right to 'green light' a project).
Developmental costs for non-starter projects and the potential loss of the theatrical rights to the ten announced properties (Captain America, the Avengers, Nick Fury, Black Panther, Ant-Man, Cloak and Dagger, Dr. Strange, Hawkeye, Power Pack, and Shang-Chi) are the only possible downside costs of the non-recourse financing agreement to Marvel -- and only if the Marvel-produced films flop and fail to earn back their cost. The upside of the agreement is that Marvel will retain a far greater percentage of the profits than it currently does in its licensing agreements with Hollywood studios. Marvel will receive a gross points (which any Hollywood type will tell you are infinitely preferable to 'net points') for producing the films and will receive all profits, including box office receipts, DVD/VHS sales, TV sales and soundtrack sales after film costs, distribution fees, marketing, principal repayment, and interest. Marvel will also retain all of the film-related merchandising revenues. In addition Marvel will be able to build its own film library with the potential for exploitation in future years.
Marvel's Avi Arad told the Hollywood trades that he was assigning writers to all ten of the potential projects and that he did not know when the first film would be ready to go in front of the cameras, although Marvel and Paramount are planning to release the first film in 2008 if not sooner. Paramount plans to promote the Marvel films as 'tentpoles' in prime spots in either the summer or Q4 holiday seasons.