Merrill Lynch Takes Stake in First Look

NEW YORK ? First Look Studios has secured a three-year, $80 million line of credit with Merrill Lynch, which also is taking a minority stake in the company. The credit is based on the company's accounts receivable, its library of film titles and its upcoming film slate.

"When we acquired the company last July, we knew we were going to take out JPMorgan's credit facility and add more equity," First Look Studios CEO Henry Winterstern said. "Merrill Lynch's facility will not only be leveraged against past revenues but also future ones based on our estimates of the theatrical, video and TV revenue from our films."

Winterstern plans to use the new funds to increase his theatrical slate from First Look's five releases this year to 10 releases next year. The new funding will complement the Hollywood-based company's current financial support from Prentice Capital Management.

Budgets for the films First Look produces will range from $4 million to a cap of $30 million. There will be no average budget, Winterstern said. "We're driven more by quality," he said.

Winterstern cited company exec Jonathan Christodoro for making the deal happen. "He was aware of the Merrill Lynch interest in this kind of facility," he said.

In addition, First Look will acquire and finance 40-50 straight-to-video titles for distribution through First Look Home Entertainment but will only produce the theatrical films it releases.

"In less than one year, we have brought together four companies ? First Look Media, Capital Entertainment, DEJ Prods. and Ventura Distribution ? to form a distinctive, innovative and vertically integrated movie company," Winterstern said. "We are now at more than $100 million in revenue at the current run rate."

He doesn't rule out expanding the new deal. "It's very possible for us to increase the facility with Merrill Lynch if a project comes up outside our current business plan that we believe in," he said.