LOS ANGELES (Reuters) - Joe Newcomb, a failed minor league baseball player who struck it rich as a Texas chemical trader, will be among those crossing their fingers in the Dolby Theatre audience on March 2 when the Academy Awards are handed out.
Newcomb financed scrappy best picture Oscar contender “Dallas Buyers Club.” In the category of film financiers, he’ll be joined by Oracle chief executive Larry Ellison’s daughter Megan, who provided funds for “American Hustle” and “Her,” by “12 Years a Slave” backer Bill Pohlad, whose family owns the Minnesota Twins baseball team, and financiers who assembled investors in Asia and the Middle East to back “The Wolf of Wall Street.”
There have always been oil men and others eager to invest in Hollywood, the last few years indicate they are playing an increasingly important role in financing Oscar contenders.
Five of the nine films nominated for best picture this year made it to the big screen with the help of investors who are outside the Hollywood studios. It’s a trend that’s intensified in recent years, as studios try to reduce their risk in making films.
“The studios’ business model no longer accommodates a lot of pictures that strive for the type of critical success that would support an Oscar campaign,” said Steven Prough, managing director of investment banking firm Salem Partners.
“They want films that have a higher likelihood of appeal to worldwide audiences, which is generated by large budgets and special effects.”
Pohlad and Ellison have been among the hopefuls before. Ellison financed last year’s Oscar nominee “Zero Dark Thirty,” while Pohlad backed 2006 contender “Brokeback Mountain” and “The Tree of Life,” which was nominated in 2012.
Ellison’s Annapurna Pictures emerged as the hot new player in Hollywood in the last few years, and not only for her check book, but also because of her willingness to take risks and support directors.
Ellison “just really believed in us and stood fast by us on a project that may have scared many other people,” said “American Hustle” director David O. Russell. “She really trusted her own instincts, and I‘m forever indebted to her for that.”
Newcomb came to the rescue of the team making “Dallas Buyers Club,” and stepped in when the original investors left the project three days before shooting was set to begin. A delay would mean the film would lose its star, Matthew McConaughey, who was scheduled to begin shooting for the HBO drama “True Detective,” said Newcomb.
The one-time minor league pitcher heard about the film when he was in Los Angeles with his friend and neighbor, Chicago White Sox slugger Adam Dunn, discussing an investment in a new “Major League” movie with actor Charlie Sheen, Newcomb said.
After reading the “Buyers Club” script, the Woodlands, Texas, businessman said he whipped out his American Express black card to help the film get started, then began contacting friends in the oil and natural gas business.
His Truth Entertainment put together $1.6 million from the investors, Newcomb says. The film also got a $1 million tax credit from Louisiana and financed the remaining $3 million.
“It’s fun, but it’s also a great alternative investment for someone who wants more than they can get from the stock market or a financial institution,” said Newcomb, who offered his investors a 20 percent return on their money.
They’ll soon get their money back plus the return, he said. The film is being distributed by Focus Features, a unit of Comcast’s NBC Universal group, and has collected more than $24 million in domestic ticket sales, according to Box Office Mojo.
“After that they’ll be getting mailbox money,” Newcomb said, by cashing checks in the future as the film continues to generate revenues as it plays on TV and is sold on DVD sales and online streaming.
Red Granite, a three-year-old Los Angeles-based film finance and production company, may not be sharing nearly as many profits for the film, “The Wolf of Wall Street.” The firm raised the equity for director Martin Scorsese’s film, which has a $100 million budget, from wealthy investors in the Middle East and Asia.
“The Wolf of Wall Street” is nominated for five Oscars, including for its stars Leonardo DiCaprio and Jonah Hill. It has ticket sales of more than $336 million worldwide, about half of which goes to theaters. Fees are also paid to Viacom’s Paramount Pictures, which distributed the film in the U.S. and some foreign territories.
Riza Aziz and Joey McFarland, Red Granite’s founders, had no comment, their publicist said. Megan Ellison and Bill Pohlad also declined interviews.
But even those who leave the Dolby Theatre without a statue won’t necessarily feel like losers, said Amir Malin, the former CEO of studio Artisan Entertainment and the managing principal of media investment firm Qualia Capital.
“Intangibles, primarily the sexiness and glitz of the business,” said Malin, “matter far more than investors are willing to let on.”
Editing by Mary Milliken; Editing by Ken Wills