Numerous outlets are reporting the studio will file for Chapter 11 unless founder Megan Ellison’s father, billionaire Larry Ellison, buys out or restructures the company’s $350 million debt.
According to numerous outlets including Variety, Hollywood Reporter and Deadline, Annapurna Pictures, the film production, distribution and financing company founded in 2011 by Megan Ellison, daughter of software giant Oracle’s billionaire founder, Larry Ellison, is reportedly attempting to restructure a $350 million credit line secured in 2017 that the company either has or is about to default on, the outcome of which may put the company into Chapter 11.
Or, the debt will be resolved, most likely through Larry Ellison’s rescue, and some order of business will proceed as usual. In either case, the elder Ellison is said to be concerned with the amount of attention his daughter has been paying to the financial realities of the business, which would seem likely to impact his decision, and under what terms, to support the bailout of the company.
Megan’s brother, David Ellison, is also in the entertainment business, though by focusing on tentpole properties, has had a much more profitable go at it; he is the founder of Skydance Media, the producer of the recent Mission Impossible hits, the Terminator sequels and the upcoming Top Gun: Maverick starring Tom Cruise. Skydance’s new animation division, Skydance Animation, recently came under fire for hiring former Disney / Pixar chief creative officer and animation legend John Lassetter, a move that raised countless industry eyebrows and caused actress Emma Thompson to pullout of the studio’s upcoming animated feature, Luck.
As best as we can assess, here are the salient points of the Annapurna situation:
- Annapurna has produced a number of highly-acclaimed, award winning films, including Zero Dark Thirty, Vice and American Hustle. On the animation front, they produced Seth Rogen and Evan Goldberg’s 2016 R-Rated animated romp, Sausage Party, and earlier this year, released LAIKA’s most recent animated feature, Missing Link.
- However, too many of their films, thought critical successes, failed to generate enough interest at the box office. Most recently, Detroit, The Sisters Brothers and Destroyer have all stumbled in theatres. Vice, made for a reported $60 million, had a worldwide gross of $78 million. If Beale Street Could Talk, which garnered 11 Oscar nominations, grossed only $20 million worldwide against a budget of $12 million. And Nicole Kidman’s Destroyer, made for $9 million, grossed only $5.5 globally.
- For the better part of a year, rumors have persisted that the company was suffering serious financial problems.
- Larry Ellison, reportedly the world’s 7th richest person to the tune of $70 billion, was widely expected to rescue his daughter and bail out the company. However, he is reportedly taking a heavy hand with the lenders, whom he has extensive dealings with, looking for them to eat 20% of the loan as a condition of his buying out the debt, which would be more palatable than the 50% or greater amount they’d certainly lose in a bankruptcy. Politically, bankers putting the daughter of the one of the world’s wealthiest people into bankruptcy could be career suicide. Hence, Ellison’s hard stance in the negotiations.
- Megan Ellison, in an email sent this morning to the company’s 80 staff members, in essence said financial restructurings happen all the time, usually not so public, and we’ll work this out and are totally committed to this business. Everything is going to be fine.
- Annapurna also owns at least 50% of United Artist Releasing, which is distributing the upcoming James Bond film that hits theatres next April 8. MGM, the studio behind the film, has said Annapurna’s situation would have no impact on the release of Bond or any other titles.
There you have it. Unfortunately, yet again, the financial realities of the entertainment “business” illustrate how creative risk takers often wow critics far more often than the paying public.
Dan Sarto is Publisher and Editor-in-Chief of Animation World Network.