Asian groups dicker for stakes in U.S. pix
The leading players are Taipei-based E.R.A., a producer, distributor and theater owner with offices in Hong Kong, Singapore and the People's Republic of China, and Dong-A Export Co. Ltd., based in Seoul. U.S.-based Dai-Ichi Entertainment, which represents Dong-A and other South Korean interests, is also involved.
Alan Schwartz, of Cooper, Epstein and Hurewitz, the lawyer and spokesman for the consortium, said the group is trying to entice involvement from other Asian interests, particularly in Japan.
Basically, the consortium's focus is in two areas, according to Schwartz and Ken Nakamura, president of Dai-Ichi. The first is "funding for rights, all rights (theatrical, video, TV, pay per view) forever in perpetuity, in certain territories. Now, for South Korean interests for example, rights last only five to 10 years," notes Schwartz. "These parties are looking for permanent ownership."
The second layer is buying an equity stake in a whole slate of films. "This equity financing allows them to own a piece of the films and they would put up additional cash for that," added Schwartz. "The proposal they are offering now is to pursue one layer or both. It allows them to cross-collateralize some of the films, so they build a profit pool."
"Boniface Chan (head of E.R.A.) and I decided to form this consortium because we both had problems and we decided we didn't want to get stung again," Nakamura said. "From our point of view, the old days of presale financing have become a dinosaur. No more can you do deals on hype.
"For my territories, South Korea may be worth say 3% to 4% for territorial rights. When it comes to negotiating power that doesn't mean squat," says Nakamura. "But if I'm in an alliance with another interest that covers several critical Asian territories, such as Taiwan and Hong Kong, we both have a lot more leverage. And if we bring in a Japanese partner, which we plan to do very soon, all of a sudden our leverage goes up better than 20%.
"All of a sudden we become very interesting to an American major."
Both Nakamura and Chan say they are in discussions with several U.S. majors. While they offered few details, they acknowledged some preliminary talks have been held with Sony Pictures. A Sony spokesman could not be reached to confirm any discussions.
Talent approval a must
But before any studio or indie can tap the consortium's capital, both Nakamura and Chan say certain demands must be met. "We will demand talent approval for equity," Nakamura said. "We also want budget approval and a certified completion bond company involved."
Schwartz noted that Dai-Ichi backed Carolco on "Cliffhanger" for distribution rights in Korea. "There, they put down a deposit of 20% and offered to pay the rest on delivery of the picture," added Schwartz. "What's different, from now on , is they will not be getting just limited rights in their territories."
One project Nakamura says exemplifies "this new Asian alliance" is "Another 9 1/2 Weeks," the sequel to Zalman King's film starring Kim Bassinger and Mickey Rourke.
"We will have territorial rights and approval rights subject to talent and final script, which is what we are waiting for now," Nakamura said of the Canadian co-production.
Another project under way is the $ 12.8 million "Jade Fog" a co-production with Nakamura's Dai-Ichi, John Mason's Snow Tiger and former Carolco prexy Peter Hoffman. It's Hoffman's first feature since leaving the struggling indie. Nakamura said he bought the picture after Carolco put it in turnaround.
John Flynn ("Out For Justice") will direct Jeff Schechter's original martial arts screenplay about a Korean crime family in Los Angeles, which playwright John Stepling has been assigned to rewrite. Both Hoffman's CineVisions and Dai-Ichi are raising the financing. Lensing will begin in early June in Vancouver's Chinatown.
