Everyone out there who believes mega-billionaire Larry Ellison is going to allow Annapurna Pictures, the production and distribution company headed by Megan Ellison, to fall into bankruptcy and general disrepute, please raise their hands.
“Multiple sources” have told Deadline‘s Mike Fleming and Dominic Patten that Annapurna “has burned through much of the $350 million credit facility the company secured in fall 2017,” and that “those sources said Annapurna has either defaulted or is about to default on that debt” and that “a deadline has been set by lenders for this week to come to a solution.”
The solution is that Larry, the fourth-richest human in America and seventh-richest in the world with a fortune estimated at $65 billion, will step in and reinvest in Megan’s company. He’s not going to just sit there and watch the ship sink. Then again something fundamental about the company’s progressive-vision-in-the-sky investment aesthetic will presumably have to change.
Fleming/Patten: “Bankruptcy would be a major embarrassment for Megan Ellison, and several sources familiar with the issues felt her father wouldn’t allow that.”
Megan Ellison memo to staff, circulated earlier today: “Restructuring deals with financial institutions is not uncommon, yet the process is usually handled without a spotlight on it. Fortunately/ unfortunately, people like to write about me and my family. That said, it is of tremendous importance to me that you all know we are as committed as ever to this company and are in full support of our future.”
Things have been downswirling for Annapurna since the crash and burn of Kathryn Bigelow and Mark Boal‘s Detroit two summers ago ($34 million cost, $24 million worldwide earnings). Adam McKay‘s Vice (which I loved) didn’t pan out financially ($60 million cost, $78 million worldwide haul). Barry Jenkins‘ If Beale Street Could Talk brought in $20 million worldwide on an investment of $15 million. I thought the popular-with-cool-critics Booksmart, which cost $6 million, might become some kind of Superbad-level hit but nope. Karyn Kusama‘s Destroyer cost $9 million but only brought in $5.5. million worldwide. Everyone seems to share concern that Annapurna’s next release, Richard Linklater‘s Where’d You Go, Bernadette, will probably underperform if not tank.
“Plant your feet, look the other guy in the eye and tell the truth” solution: Larry and Megan agree to bring in Hollywood Elsewhere as a senior consultant with veto power over all projects. If I don’t like a script or where the development is going, it’s history. I guarantee you things would change under this arrangement, and that super-toney, progressive-minded, representation-driven prestige projects would have a much harder time of it, you bet. For I can smell trouble a mile away. I’ve always had this knack. Plus I know everyone and everything, and I’m a “man of the people” — the culture flows and churns within my system on a daily basis. Plus I occasionally eat hot dogs.
Fleming/Patten: “Annapurna secured in fall 2017 a $350 million senior credit facility, with J.P. Morgan serving as administrative agent and co-lead arranger with Comerica Bank. Banks in the funding lineup when it was announced were City National Bank, First Republic Bank, HSBC, MUFG Union Bank, SunTrust Bank and Wells Fargo.
“Finance sources said the bankers feel betrayed: while Larry Ellison’s family office was portrayed as being very involved in the marketing documents sent to the banks and indicated the office was behind his daughter’s venture, there was no commitment from Larry Ellison in the final documents.
“That gives the Oracle co-founder a measure of leverage, beyond him being a big customer for major lenders now and in the future. Putting [into] bankruptcy a company founded by the daughter of one of the wealthiest men on the planet would involve the banks’ CEOs and Risk Committee approval, something most bankers involved think might be political suicide for them.”
