EXCLUSIVE: C2 Motion Picture Group has quietly put more than $100M into four Paramount movies in the past 12 months: Mission: Impossible — Dead Reckoning Part One, Transformers: Rise Of The Beasts, Dungeons & Dragons: Honour Among Thieves and Babylon.
The LA-based financier-producer is now in talks with the studio to potentially invest in double that number of movies.
In the past 18 months, C2 has also fully financed indie movies including Jodie Comer starrer The End We Start From, Michael Keaton dramedy Goodrich, Samara Weaving horror Azrael, and thriller Longlegs with Nicolas Cage.
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The company was set up by Jason Cloth and Dave Caplan. Cloth is the founder of Creative Wealth Media, which with former partner Bron notably had a co-fi slate deal with Warner Bros and backed movies including Joker. Caplan recently produced and directed hip-hop documentary The DOC, and previously produced on a string of TV series including ABC Family’s Monica The Medium.
In a wide-ranging chat, we spoke to the duo about collaborating with Paramount, highs and lows at the box office, the health of the indie market, Bron as a “cautionary” tale, and the impact of the strikes.
FORMATION & STRATEGY
DEADLINE: How did C2 come about?
DAVE CAPLAN: Jason and I became friends socially. We worked on a project that has not been announced yet, and I think we found after spending a lot of time together that we have the same creative sensibilities, which I think lean very commercial. We talked about the direction for a new production company/mini-studio/film financier that leaned very commercial, that was very filmmaker-forward and filmmaker-sensitive, but also wanted projects that we would want to go watch in theaters. We were having those conversations 18 month to two years ago.
DEADLINE: How is the company capitalized?
JASON CLOTH: C2 is the next iteration of Creative Wealth. So, we have the same institutions, the same philosophy of going after high-net-worth family offices. It’s designed to raise capital on a more sophisticated institutional level.
DEADLINE: Like Creative Wealth, a key resource is the Canadian pension funds as well?
CLOTH: Correct.
DEADLINE: Which fields are the family offices in?
CLOTH: Different fields. Family offices tend to be more open to film financing because they’re generally more open to alternative investments, which is how we pitch film investing. They’re usually very entrepreneurial.
We’re always open to new partners, but we just can’t take on an unlimited number of indie movies and there is a maximum amount that we will have available from Paramount. We’d rather have fewer better partners than money from any source.
DEADLINE: Creative Wealth was a key financier of Bron, which was previously very active but has recently filed for bankruptcy. What’s the status of your collaboration with them?
CLOTH: Bron doesn’t factor into C2 at all. C2 doesn’t finance shows produced, sourced or originated by Bron. Creative Wealth hasn’t financed anything from Bron in the last year and a half. Bron has gone on to do other things. Dave and I are more aligned in what we want to do going forward than Aaron [Bron CEO Aaron Gilbert] and I were. So, that’s where we are.
DEADLINE: Are you still a director at Bron?
CLOTH: No.
DEADLINE: For anyone looking from the outside who may be in two minds, what separates C2’s ambitions from those of Bron? There are some similarities. Is it about being more streamlined?
CLOTH: It’s definitely more streamlined. Dave and I are very cognisant of costs. We’re very cognisant of budgets, very picky as to the types of projects we do. I love Bron and Aaron, but I would very much use them as a cautionary template as to what I would do and what I wouldn’t do, and what works in the market and what doesn’t work. I would be foolish not to take a look at what got them to where they are.
DEADLINE: Financier Hudson Private sued Bron and Creative Wealth for failure to repay an investment. What is the status of that legal case?
CLOTH: That was a little complicated. It wasn’t quite what was reported. Let me just say that monies that they were not entitled to, they did not get, and films that they actually invested in, they are getting their money from. So, that’s where that is. It didn’t quite go for them the way they thought it was going to go.
DEADLINE: And it’s ongoing?
CLOTH: It’s only ongoing because of Bron’s situation. But that’s about as much as I can say.
DEADLINE: It sounds like C2 will look to avoid having as many strings to its bow as Bron tried to add?
CLOTH: Dave and I would do a lot of market analysis before we decided to get into something outside of our core. That said, we have been discussing TV…
CAPLAN: We’re definitely interested in TV. We’re exploring a few different projects and we’re definitely interested in unscripted. From a marketplace perspective, because we have funding, that gives us more of a competitive advantage in the indie film market, versus selling a TV show to a streamer, or network, where from my experience streamers tend to like to get packages, and then co-develop alongside the producers or studio.
Having funding and making a pilot, or making a series independently, and then taking it to a streamer can be very risky, more so than funding an independent film. So, yes, we are interested in TV but we haven’t found the right project to greenlight yet. But there are conversations going on. Come January, we’ll be leaning into TV in a bigger way.
In terms of our film output, we’re being focused. There may be the odd exception if a filmmaker we love becomes available, but we’re concentrating on three commercial genres: thrillers, elevated action, and elevated horror. If the right commercial dramedy or rom-com coms along, we’ll still do it, like Goodrich with Michael Keaton and Mila Kunis. The team and script were so good that we couldn’t say no. Our producing partner on that, Daniela Taplin Lundberg, is a brilliant producer.
CLOTH: We’re not very interested in co-financing and having a passive role…
DEADLINE: What credits do you normally take on projects?
CLOTH: I’m usually executive producer while Davis is producer, along with a company credit.
DEADLINE: What budget do you have at your disposal each year?
Dave: It’s more related to the project, and what we deem the value of that project to be. We would do a 70 million-dollar Guy Richie movie, depending on the auspices, and we would consider that in the same way that we would look at an eight million-dollar horror film.
DEADLINE: You haven’t financed a big Guy Richie movie yet, right?
Dave: We have not. Jason and I are executive producers on Guy’s new movie with Henry Cavill and Eiza Gonzalez, which is in post-production. We’d love to do more with him.
DEADLINE: But, you have very deep pockets…
CLOTH: What it means is that our investors have confidence that what we greenlight for a year meets our greenlight criteria, and they would be fine putting up capital to finance those productions. Dave and I read a lot. Dave reads a tremendous amount. But there’s a limit.
We’re looking at ten, maybe ten-plus indie movies a year, in addition to our studio slate business. We would go out and raise a separate capital pool for our TV business.
CAPLAN: Most of our projects are under $25M. The sweet spot for us is probably $8-15M.
PARAMOUNT DEAL
DEADLINE: So, coming to your deal with Paramount…
CLOTH: I’d probably call it a multi-picture strategic partnership. We couldn’t be happier with the partnership and the deal terms that we’ve got from them, and the collaborative nature that their executives have adopted. I’ve not seen anything like it in the years that I’ve been doing slate financing with major studios.
They will divulge the details when ready but we have a rather large, growing business with Paramount that we want to expand to whatever level they will allow us. Talks are ongoing.
DEADLINE: Before we get into that deal, I want to go back a couple of steps to your previous slate deal with Warner Bros. To what extent was the critical and financial success of Joker a transformational one for Creative Wealth as an investor? I know you’ve said in the past that the funds you manage accounted for a quarter of that film’s budget. Did that film help open doors at Paramount?
CLOTH: I don’t think it was transformational. It’s certainly something that everybody still wants to talk about. Being part of of quite a few studio films was more transformational than anything else. Before Dave and I took on the Paramount partnership, I was pretty much done with the slate financing side of things. We weren’t really treated much like partners before Paramount.
I began to realize that certain terms weren’t being given to you because that would’ve given you a slight advantage. It wasn’t a very fair game to play. I was lucky enough to have a lunch with my lawyer and one of the heads of co-finance at Paramount, at which I expressed my dissatisfaction with that side of the business, and then we started discussions.
Skydance was leaving Paramount at the time, so it really was fortuitous that we were speaking when we did. That was last year’s Cannes Film Festival.
It’s a little like playing Blackjack. Even if you play exactly like the house, the house still has a small advantage. That’s always what’s going to happen in studio slate financing, but the idea is to get as close to even with them as possible, and I think, given the way Paramount has treated us, we’re as close to that type of deal as anybody. We probably have the best terms of any major studio slate financier.
CAPLAN: The executives at Paramount are also very, very good. Brian Robbins, Marc Weinstock, Mike Ireland, Daria Cercek and Peter McPartlin are very smart, and they have very good taste.
CLOTH: There aren’t many studios you can do a deal like this with. MGM no longer exists in that way. We’ve spoken to Warner Brothers, but there are just certain terms, deal points, that they are not open to giving us…
DEADLINE: You’re not going to disclose precise deal points but what are the parameters of these deals?
CLOTH: It’s about how close to being on par with the studio can we get in terms of return on investment. That’s what all the different terms do. It’s about minimizing the layers between you and the studio to make it more fair.
DEADLINE: What is your investment in these movies?
CLOTH: The overall deal is nine figures across the four films we’ve done, and then it would be substantially more than that for the films that we’re negotiating now. We’ve identified seven or eight movies we’re negotiating terms on now.
DEADLINE: That’s a lot. Was Mission your biggest outlay? [We understand that C2 filled a gap in financing left by Chinese financier Alibaba]
CLOTH: One of the things I learned with Joker is just because I know information doesn’t mean it’s always a good thing to give it out. Paramount didn’t need to co-fi those movie with us but it was about beginning a collaboration. If you really want to be in the slate finance business long-term, you need to have a piece of everything…
DEADLINE: And some you need to take a hit on…
CLOTH: Yes.
DEADLINE: So, Babylon…
CLOTH: When I say that I would want to be part of everything that Paramount does, I’m not joking. If they said, you could have a piece of everything, you know, that would be the direction I would move towards.
DEADLINE: So it didn’t sting for your investors that the first project was Babylon, which didn’t make strong returns?
CLOTH: Well, that’s just representative of the film business. Looking back on it, and I’m just going to speak for myself, I loved the movie. I love the filmmaker. But the movie got on the wrong side of critics and it began to take on a life of its own. Sometimes that happens.
I don’t agree with the critical review of the film as it stands now, but I’m very proud to be part of a Damien Chazelle movie and I’m proud that that was our first film with Paramount. They treated us with respect and grace. They were collaborative, even though we knew it was going to be a rough go, and it was a testament as to why we decided to do other films with them.
DEADLINE: What is your assessment of the box office return so far for Mission?
CLOTH: We’re hopeful that the movie legs out and performs solidly through the rest of summer and hits the numbers that Fallout reached. The average Mission movie does 4.7 times its opening weekend. They tend not to be front-loaded. It’s more of a slow burn. I predict there will be some solid holds all the way into September.
DEADLINE: If it gets to nearly five times its opening weekend you’ll all be very happy, I’m sure. That looks challenging…
CLOTH: It’s an expensive movie. It was built to do that. There was almost no other direction for it to take — it had to be one of the biggest-grossing movies of the year.
DEADLINE: Very expensive, yes. If the $290M budget is accurate that would rank it in the top 15 most expensive movies all time…Have you been surprised by the box office performance of Barbie and would it have been less risky for Mission to open on a date further from that and Oppenheimer?
CLOTH: We believed Barbie would be a huge hit, but were still taken back by the enormity of the cultural phenomenon surrounding it. Looking at the summer 2023 box office, we all knew it was going to be a highly competitive frame and have always trusted and maintained confidence in Paramount’s releasing strategies.
DEADLINE: Just looking from the outside, it could be said that none of Babylon, Dungeons & Dragons or Transformers have taken off at the box office. Mission, it remains to be seen, but it probably hasn’t done as brilliantly as hoped out of the gate. Do your core investors get spooked by those box office numbers? And if not, does that give credence to some people’s views that have been aired during the strike that ultimately studios never lose?
CLOTH: The studios certainly can lose. But box office isn’t the only barometer for success these days. Box office might be a bit lower but that might be a trend, not something that’s unique to these movies. Transactional business is way, way up, but that’s not reported on as much. Box office is one of around eight windows of revenue that these films generate, so the mix is just different nowadays.
DEADLINE: So, you and your investors were happy with the returns on Babylon, Dungeons & Dragons, and Transformers?
CLOTH: Babylon was not commercially successful. But there’s more to these deals. We gain a level of copyright ownership. Owning a piece of one film might not have a lot of value, but owning a piece of 30, 40 or 50 films at a major studio has a lot of value.
DEADLINE: Sure. A lot of the numbers you’re referring to aren’t readily available or disclosed by studios or financiers. That’s probably why we still think primarily about box office…
CAPLAN: Yes, those numbers aren’t generally divulged. The rentals list on the iTunes app gives you a small indication of what’s going on…
CLOTH: We [Bron/Creative Wealth] were co-financier on The Addams Family during Covid. We sold millions and millions of copies on iTunes at $19.99. Dungeons & Dragons has spent a long time in the top five rentals on iTunes and you can get it on Paramount Plus. The market has changed a bit. People are now more comfortable renting at home.
DEADLINE: Why wasn’t C2 mentioned in the marketing and press around Mission and one or two of the other movies?
CLOTH: Our involvement came quite a bit later than everyone else’s [but still before release], and perception is everything. We’re just thankful to have been a part of these incredible movies. Our clients know whether or not they’re part of these films. We don’t have credits in the film, and the extent of the publicity was that Paramount was ok with us talking to you now about our involvement in them, and we’re fine with that. On the other films coming out in future, our involvement will be front and center. We are involved much earlier on those. Some of these have releases well into 2024 and 2025.
STRIKES & LANDSCAPE
DEADLINE: Among projects that haven’t shot yet for you is Stephen King adaptation The Monkey. I suppose like many, you’re in a holding pattern with regards to an interim agreement?
CAPLAN: Yes. There’s a level of complexity in getting them but our indie movies are true indies.
DEADLINE: Around the time of Cannes you did a deal with Paramount for Jodie Comer movie The End We Start From. That movie will be going to Toronto but presumably without Comer and her co-stars…
CAPLAN: Yes, it’s complicated over who will be able to promote the movie. We think our director Mahalio Belo will be there but we’re not sure yet about cast. We put our blood, sweat and tears into it so we’re hopeful it can get the recognition it deserves.
CLOTH: The festivals are certainly going to be very different if a number of the actors can’t make it. It’s far from ideal. There’s an electric buzz you get from proper festival launches. You don’t get that if the talent isn’t attending.
DEADLINE: How long do you think these strikes last?
CLOTH: I don’t know. Barry Diller previously predicted that if it goes into late September there’s Armageddon coming for the industry. I don’t know if that’s the case, but certainly somebody like that would be in a better position to comment, and it’s fairly ominous if that’s his take.
CAPLAN: I don’t have any special knowledge, but I think that the negotiations will pick up in earnest probably late September, early October. I think it’ll probably go until late October, early November. Taking into account the major points of disagreement, studio release schedules, speaking to people on the inside, and from reading interviews.
CLOTH: I think the easiest way to look at it is, at what point is there enough pain on both sides that they’re motivated to start talking and compromising.
CAPLAN: At what point does the lack of content impact churn at streamers, or will streamers be more inclined to license more library content to reduce the churn, and when will that reach an inflection point? If they start to see major churn, I think that’s when negotiations may pick up, but if that doesn’t happen, I think it could cause it to go longer.
We’re in business with both sides of this, the studios and the indies. We’re supportive of everyone getting a fair deal.
DEADLINE: A broad one to end. What’s your take on the health of the film and TV markets right now? Before Barbie, it felt like a number of these big movies weren’t hitting home at the box office, which I know we’ve discussed is only one metric. We have streamer retrenchment, global economic challenges, the TV market isn’t what it was a few years ago…
CAPLAN: That’s very broad and will be different for each sector. For an independent producer in unscripted television, it’s probably very challenging, as it is for a non-writing executive producer of scripted TV. For an independent film financier of very commercial, well-priced content, in our experience thus far, it’s healthy.
CLOTH: But the truth is that that segment represents only a few percent at the top, and then there’s 95 percent of indie producers and financiers that really do not have a very good finger on the pulse of the market.
Even Oscar-nominated dramas often don’t resonate widely today. The first question we ask is, will people want to watch this? You’d be surprised how many people don’t ask that question.
DEADLINE: Wasn’t the Cannes market indicative of challenges in the indie finance space that you guys specialize in? We announced more projects, pre-sale packages, than I’ve ever announced before. Good ones with strong cast and fundamentals. But it was very quiet when it came to announcing sizeable deals.
CLOTH: Well, except that we had two movies and both did well. We did very well on The Monkey, for example.
CAPLAN: The market has been in contraction since what some call ‘the Netflix correction’. It feels like fewer series are being announced, and probably fewer films are being seen in the cinemas.
I think peak television has already happened, but as we’ve seen, when a movie pops it becomes an event and part of the cultural conversation and you can still see big breakouts. Mario Brothers, Barbie…and look at Smile. I think people are still showing up for horror in a big way. Action movies, too, with that 17-day theatrical window, that can be a good space. And then with transactionals, I think what they did with movies like Plane and Violent Night was smart.
CLOTH: There’s still a fair bit of delusion from some producers about what the prospects are for their film. Often that relates to theatrical.
CAPLAN: Marketing is so key right now. Look at Sound Of Freedom…
CLOTH: One of the things I always say to Dave is to savor the good. In the film business, success is so difficult to achieve. It’s such an easy concept to explain to people, but it’s so infinitely difficult to achieve.
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