James D. Stern, CEO of eight-year-old Endgame Entertainment, has long been one of the wilier indie players around, combining the ability to co-finance (Hotel Rwanda, Lord of War, Proof, White Noise, Harold and Kumar Go to White Castle) and produce quality indie films (An Education, Every Little Step, The Brothers Bloom, I'm Not There) with sound business sense. He knows the indie market as well as anyone and that experience has enabled him to put together this deal, in effect filling a gap in the indie distribution cycle.
More studios these days, when acquiring indie films, are asking filmmakers to raise some P & A, so Stern is filling that need. Endgame Releasing would also help filmmakers who lack North American distribution to obtain pre-financing by boosting confidence levels in indie projects for domestic TV and international buyers. It's interesting that he's insisting on 1800-screen wide releases--that has to do with ancillary market demand for a certain level of theatrical exposure. This deal will mainly serve mid-level genre films with mid-level companies such as Lionsgate, Open Road, Film District, and Relativity.
Endgame is stepping opportunistically into the service distribution deal arena that is very much in flux--they're calling their P & A deal a "non-exclusive, multi-picture model." They's saying each filmmaker will be able to have more say in matching their film with the right distributor and release date.
It sounds good on paper; but putting up P & A against a piece of a distribution deal is one thing-- a financial arrangement for Endgame. It remains to be seen how much helpful strategic marketing acumen they will bring to the table.
Endgame will use its Releasing arm on Rian Johnson’s Looper, starring Joseph Gordon-Levitt, Bruce Willis and Emily Blunt, by co-financing marketing costs with FilmDistrict for its 2012 release through Sony’s Tri-Star Pictures. Stated Endgame president Douglas E. Hansen:
“With studios reducing the size of their slates and seeking P&A funding for a variety of reasons, we feel there is no better time to offer an alternative funding source for domestic marketing costs, we believe that Endgame Releasing is a unique, financially viable model that will benefit producers, investors, filmmakers and studios alike."
Endgame Entertainment has invested the equity portion of the $150 million revolving financing facility. London-based Octopus Investments is providing the mezzanine debt and a consortium of banks lead by Comerica and Union Bank are providing a revolving senior debt facility.