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'New' Summit Structure Retains Distribution Fees

By ALM Staff | Law Journal Newsletters |
May 30, 2007

Summit Entertainment's $1 billion movie financing deal ' which created a new production and distribution studio ' all started with a group of bankers and lawyers sitting around and talking about how to get more money from movie-financing deals. In recent years, investors have invested in films that are distributed by studios, which take a distribution fee of about 10% to 15%. With the Summit deal, the investors for the first time cut the middleman in this process.

'Here, they are the studio, and they're getting the benefit of the
distribution fee,' said Joshua Grode of Liner Yankelevitz Sunshine & Regenstreif, who represented the new Summit. 'It really changes the economics dramatically.' Outside investors financing Hollywood films took off about three years ago, Grode said. 'This is an evolution of the financing technology and the deal structure.'

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