After the expiration of Apple Studios’ first-look deal with Paramount, Apple deepened its partnership with Skydance Animation with a multi-year deal to produce a series of animated films and TV series in 2021. In January this year, Apple acquired a slate of live-action films from Skydance, and that “lucrative and rarified” deal has left the industry stunned.
The Variety reports that Skydance’s deal with Apple Studio is one of the richest received by any production company in the industry that resembles a “put deal”, a rare Hollywood arrangement in which the distributor is obligated to only release the movies of its partner’s choice. David Ellison, the owner of Skydance Media, is being praised for carving out a beneficial pact for his company which has only been achieved by a few; “Jason Blum’s Blumhouse, Jordan Peele’s Monkeypaw, and Arnon Milchan’s New Regency are a few of the players that have commanded similar pacts.”
Apple Studios set a $125 million budget to finance two movies per year from Skydance
Since its launch in November 2019, Apple Studios has been very selective in choosing its media partners to produce quality original titles for the video streaming service. Therefore, its pact with Skydance reflects the importance of the media house for Apple which is willing to spend huge sums on movies Skydance will produce and release.
Though not unprecedented, industry observers say the deal between Skydance and Apple is among the richest received by any production company.
Under the terms of the pact, Skydance is guaranteed at least two fully-financed feature films per year with budgets up to roughly $125 million, numerous insiders close to the situation said. Skydance is also guaranteed a payout of up to $25 million per picture, depending on certain budget thresholds. That money compensates Skydance for the backend profits it theoretically would have reaped if the film were a conventional box office success. The movies that Skydance releases for Apple are not guaranteed theatrical runs.
Theoretically, Skydance can make Apple finance any project it wants, but that is unlikely to happen because it can sour their relationship and a golden business opportunity; Skydance will have copyrights to all the projects and both companies will share the downstream revenue.
Creative executives at Apple, including the leads on the Skydance deal Jamie Erlicht and Zack Van Amburg and features head Matt Dentler, will work to identify which films from Ellison’s slate will qualify under the two-picture minimum. Sweetening the pot is the fact that, in essence, Skydance will retain copyright to all intellectual property it produces at Apple. Both parties will share downstream revenue, and the arrangement leaves room for additional profit participation for Apple, sources said.
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