Studios, Relativity Media Raise Funds for 19 Films

Sony Corp. and Universal Pictures raised $700 million through closely held Relativity Media to finance 19 films through the end of 2007, the second time this year the three have partnered to raise production funds.

The deal, Gun Hill Road II, lets the studios keep creative and distribution control of their films, the partners said in a statement Thursday.

Hollywood studios are exploring new financing to reduce risk as production and marketing costs have risen and box office and video sales have slowed. The $700 million will provide about half the films’ expected costs, Relativity co-Chief Executive Ryan Kavanaugh said.

The deal follows one in January in which the partners raised about $600 million for 18 movies.

The studios and Beverly Hills-based Relativity didn’t give the names of investors or the films to be financed.

The total production costs of the 19 films will be about $1.4 billion, Kavanaugh said.

Like the first deal, investors will receive a share of profit from the films after studios recoup their distribution costs, he said.

The movies will be released between the last quarter of 2006 and the end of 2007, the companies said. The films selected for the deal were chosen on the strength of the cast, director, production teams and studio, they said. The $700 million will be split about evenly between the two studios.