U.K. fund aims to pay P&A for WB pics

ScottsAtlantic footing the bill for this and 'That'

By ADAM DAWTREY

LONDON -- Warner Bros. is tapping U.K. investors for a fund to pay the P&A costs of releasing up to 10 movies in selected territories, starting with "Analyze That," "Kangaroo Jack" and "Two Weeks Notice."

ScottsAtlantic, a London-based film financier, is raising the money. Rival studios and other British tax financiers are closely watching the pioneering scheme, which was pitched to potential investors in January.

If it raises its initial target -- believed to be $80 million -- and passes muster with U.K. tax authorities, it could spawn many copycat funds. However, tax analysts believe that ScottsAtlantic's scheme will come under close scrutiny from Inland Revenue before winning approval.

In essence, the fund has agreed to buy distribution rights to up to 10 Warner pics for a seven-year term. The films are chosen by Warner, whose distrib arm will handle their release using the fund's P&A coin. The studio has a call option to buy the films back after about a year.

Investors are being asked to contribute 29.5% of the value of the fund, with the rest consisting of a loan underwritten by Warner.

Execs at ScottsAtlantic could not be reached for comment.