1 December, 2003
By Adam Dawtrey and David Rooney
Source: Variety
Ed Pressman and John Schmidt’s Gotham-based independent production banner ContentFilm will announce plans in London today for a merger with publicly listed U.K. sales and distribution company Winchester Entertainment.
Deal is structured as a reverse takeover of Winchester, which itself recently merged with Alton Irby and John Muse’s film sales and financing outfit Cobalt Media Group. Pending shareholder approval, Winchester will acquire Content, allowing Content to take over the running of Winchester by becoming its controlling shareholder.
Co-CEOs of the new company — to be called ContentFilm Plc. — will be Pressman and Schmidt, with a board of directors to be appointed in the next two weeks, including representatives of both Content and Winchester.
Irby, Muse, and film finance expert Rodney Payne will continue to play a significant role in the new entity, to be headquartered in London, with operations in New York and Los Angeles. Pressman and Schmidt will remain primarily New York-based.
Winchester’s stock was suspended Nov. 27 on London’s Alternative Investment Market as word of the negotiations started to leak out.
Deal will transform Winchester’s business and image by linking with a leading U.S. indie production outfit. Winchester met with financial difficulties last year, forcing the board to seek new strategic options.
New company gives Pressman and Schmidt access to the wider financing opportunities offered by public listing in London and creates economies of scale by combining Content’s own London-based sales subsid, Content Intl., headed by Jamie Carmichael, with the Cobalt/Winchester operation.
That continues the recent trend toward consolidation in the foreign sales business, in response to the market slump over the past couple of years.
It also gives Content a U.K. distribution outlet, since Winchester releases its own films in Blighty. In addition to planning U.K.-based productions, the deal’s backers intend to use the merged company as a vehicle for further acquisitions in Britain and abroad. Aim is to build a major integrated film company capable of financing, production, and distribution that will partly fill the gap created by the closing of FilmFour.
“Content from the beginning has always intended to be an internationally -minded company, not America-centered, and this is a way to achieve part of that vision,” Pressman told Daily Variety.
“This gives us the opportunity to expand in a carefully thought-out way,” added Schmidt. “It will take the production footprint we’ve developed and extend that to London, giving us a U.K. production presence. It puts us into a publicly listed company in the U.K., and that will enable us to raise money for future acquisitions and growth opportunities.”
The final terms sheet on the deal was signed over Thanksgiving. Next phase involves presentation of a proxy statement to Winchester shareholders for approval, and a similar presentation to Content’s private shareholders. Deal is expected to be finalized within six to eight weeks.
ContentFilm Plc. will become the U.K.’s largest listed film company, and it will be backed by some powerful investors. American financiers Irby and Muse own 10% apiece of Winchester following the merger with Cobalt, while Content’s leading shareholders include Munich-based Syntek Capital and Frank Biondi’s WaterView Advisors. Irby and Muse will invest additional capital in the new company.
“This puts us in business with some very savvy people who have built Winchester to the place where it is now,” said Schmidt. “The deal also brings some terrific investment brainpower into the mix for us.”
Often labeled as the godfather of Gotham indie filmmaking after 30 years in the business, Pressman joined forces in 2001 with Schmidt, formerly co-prexy of October Films and chief financial officer of Miramax, to launch Content, which aimed to produce small-budget movies, many of them shot digitally.
Company has made eight features in the last two years. Its most recent credits include David Gordon Green’s The Undertow, Ernest Dickerson’s Never Die Alone, and Wayne Kramer’s The Cooler, which opened this weekend in the U.S. through Lions Gate.
Content owns a stake in Jason Kliot and Joanna Vicente’s Blow Up Films in New York and has a strategic alliance with Furst Films and WMA Independent in Los Angeles. Company also has a co-financing deal with Australian producer Andrew Mason, and Content’s London arm has its own development slate of British projects.
Winchester’s current sales slate is made up largely of Cobalt titles, including House of Sand and Fog and Open Range. Company now trades under the Cobalt name, reflecting the balance of power in the merger. Former Winchester chief exec Gary Smith ankled last month, although he remains a significant shareholder.
Foreign sales of the entire library will now go out via London-based Content Intl., which Carmichael will continue to head, while U.S. sales will continue to be coordinated by Content’s domestic division.
