Paramount drops $450 million movie financing deal

July 15, 2008 6:39:56 PM PDT
A tight credit market prompted Viacom Inc.'s movie-making subsidiary, Paramount Pictures, to drop a deal for $450 million in financing from Deutsche Bank, the companies said Tuesday.

The studio had been seeking the financing to contribute to a three-year, 30-movie slate, including sequels to "Transformers" and "Star Trek," but decided not to proceed several weeks ago.

"The deal terms had evolved to a point where they were unattractive when compared to alternative sources of financing available to Paramount," said spokeswoman Patricia Rockenwagner.

The studio said the decision will not affect its moviemaking plans because projects in the pipeline, including "Transformers," "Star Trek" and "G.I. Joe," already have co-financing deals in place.

Deutsche Bank had no comment on the deal but acknowledged its film financing team had left the bank several weeks ago as the bank scaled back activity in the sector.

"We are maintaining our entertainment financing capabilities, but we continue to realign our business in response to changing market conditions," said Deutsche Bank spokesman John Gallagher.

Major movie studios spent an average of $106.6 million making and marketing each of their films in 2007, up 6.3 percent from 2006, according to the Motion Picture Association of America.