This afternoon the Financial Times reported that a finance deal between Paramount and Deutsche Bank has fallen through. The FT report states that Paramount is seeking funds to partially finance “up to 30 films, including possible blockbusters such as the sequel to Transformers and a new version of Star Trek.” However a trusted studio source tells TrekMovie that this deal will not have an impact on the post-production of Star Trek.
Dozens of fans have emailed TrekMovie with the Financial Times article. This is likely due to the article getting top billing at the popular sensationalist Drudge Report website. Although the headline seems concerning, the facts are that the deal is just an attempt for Paramount to mitigate some risk in its portfolio, which is standard practice. Remember it was just a month ago that Paramount announced it was the first studio in 2008 to cross the $1 Billion mark in sales (both domestic and international), so it isn’t like they are broke.
A trusted insider tells TrekMovie that this deal has no impact on Star Trek, noting “we have already shot the movie.” The source said that the post-production was budgeted and they are still working to finish the film by the end of the year. The source also noted that Paramount already entered into a co-financing agreement for Star Trek with Level 1 Entertainment. Although such a deal is new for Trek, it is becoming more and more common with tent pole films.
A Paramount source tells Deadline Hollywood a similar story, noting (on the Star Trek Level 1 deal and other similar deals Paramount has for other films):
We like those deals and economics much better. They’re far stronger for us,. We’re very comfortable as is Viacom with our business plan. We’ve now laid off as much risk as we need to.
Also it should be pointed out that it was Paramount that backed out of the deal and not Deutsche. A spokesperson tells Variety:
The deal terms had evolved to a point where they were unattractive when compared to alternative sources of financing available to Paramount
The failure of the Deutsche deal does not mean that Paramount will not be able to lay off the risk, the FT notes that Paramount will wait until credit markets are more favorable or in the worst case just seek funds from the corporate parent Viacom. Regardless, it will not effect the release of any of the films that are part of the financial package, as noted by the FT:
While Deutsche’s decision to close its film unit is a blow for Paramount, the films affected by the deal are still likely to be released as scheduled.
But if the studio fails to revive the deal with another bank it could force Paramount to seek funds from Viacom, the media conglomerate that owns the studio, to produce the titles. This would expose the company to greater financial risk if the films fail to perform as expected.
Paramount Vice Chairman Rob Moore backs that up, telling Variety the deal falling through "won’t affect our current or long-term production slate."
Bottom line is that this is just Paramount working to do some financial risk management. The latest deal fell through, but other deals are to be had and in the end it is not really anything that affects Star Trek .