EXCLUSIVE
Plenty of Hollywood veterans raised their eyebrows when Abu Dhabi announced its plans to head hard-core into the movie business by launching a $1 billion film fund two and a half years ago.
Now the strategy appears to be in meltdown. The CEO of the Abu Dhabi Media Company (ADMC) and its film fund, Imagenation, Edward Borgerding, is out on his keester along with his number two Stefan Brunner. Meanwhile a pair of new bottom-line executives – Michael Garin and former CFO Frank Mooty – have come in to lay down the law.
Imagenation doled out hundreds of millions in film deals over the past two years – to National Geographic, Participant, Hyde Park Entertainment and Walter Parkes, among others.
They’ve made a half-dozen movies and, according to one knowledgeable insider, have lost more than $100 million on them thus far. Danielle Perissi, a spokeswoman for ADMC, said she could not verify the number, but noted,
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"This is a long term investment on the part of Imagenation. You don't look at capital gain immediately."
Also Read: Abu Dhabi's Film Plans Stuck In Neutral
Those losses came home to roost in a sudden decision by the board of directors two weeks ago to terminate Borgerding. He's been trying to get himself reinstated, so far without success.
Instead last Friday Garin – a member of the Abu Dhabi Media Company’s executive committee and former TV executive – got the job.
(Click on chart to see full size.)
Borgerding is not the only one ousted: Mohamed Khalaf al Mazrouei – Abu Khalaf to those who know him – was recently removed as chairman of the Abu Dhabi Media Company. He was replaced by a close adviser to the emirate’s ruler, Mohamed Mubarak al Mazrouei.
The math of Borgerding’s slate was what led to his and Abu Khalaf’s ouster.
Among the films that have lost money include Participant’s “Fair Game” (cost: $22 million, worldwide box office: $20 million) and the animal farce “Furry Vengeance” (cost: $35 million, worldwide box office: $35.9 million).
The recently released Peter Weir film “The Way Back” has lost the fund more than $12 million, according to the insider, and another $15 million was lost on the Robert Rodriguez movie, "Shorts."
Also Read: New Money: Abu Dhabi Goes Hollywood
Scarier still: Imagenation just threw in with Participant on a new Matt Damon-Steven Soderbergh movie, “Contagion,” which one source told me has a production cost of $80 million. Participant did not return calls to confirm the information.
One exception among the deals may be the mid-budget projects at Ashok Armitraj's Hyde Park - "Ghost Rider 2" cofinanced at Sony and the upcoming "The Double" starring Richard Gere, which benefits from huge rebates in Michigan.
