Annapurna started off in 2011 as a mechanism for Megan Ellison, daughter of Oracle co-founder Larry Ellison, to invest in and produce films she felt passionate about. Film such as “Zero Dark Thirty,” “Her,” “American Hustle,” “Foxcatcher,” “The Master,” “Sausage Party” and “Spring Breakers,” among others. Not all of them were financial successes, but enough were. And they led to a slew of Oscar nominations including four Best Picture nominations. In 2017, Annapurna began to market and distribute its own films. That’s when things started to take a turn for the worse.
READ MORE: Annapurna and MGM form United Artists Releasing
As a distribution entity Annapurna has had little luck releasing its own productions. Beginning with “Detroit” in 2017 to the quartet of “The Sisters Brothers,” “Vice,” “If Beale Street Could Talk” and “Destroyer,” Annapurna has lost money on almost every one of its releases except “Sorry to Bother You” and, surprise, “Booksmart.” The problem isn’t just that he films lost money. When you don’t have a major hit on your hands even the overhead of a company becomes a financial burdern. Granted, for a good chunk of time those costs were covered by releasing MGM “Creed II” domestically. In fact, without MGM Annapurna might not even have lasted this long.
In February, Annapurna and MGM created a joint venture, United Artists Releasing, to distribute both their slates. Many Annapurna veterans were folded into the new company which has had a few minor hits including MGM’s “The Hustle,” the afformentioned “Booksmart” and “Child’s Play.” It’s big potential moneymakers, however, are the MGM produced “Addams Family” in October, “Bond 25” in April 2020 and “Legally Blonde 3” in May 2020. Whether Annapurna is still part of UAR at that time remains to be seen.
News broke today that Annapurna has either defaulted or is about to default on a $350 million credit facility it secured in late 2017. . The lenders involved are considering putting Annapurna in Bankruptcy. A move that few film companies survive (The Weinstein Company being one of them). What makes this situation so unique is Larry Ellison’s involvement. The senior Ellison’s estimated net worth is $71 billion. Covering Annapurna’s debt should be chump change to him, but he won’t make it that easy. Because Ellison has relationships with these banks through his other businesses he’s supposedly negotiating hard terms on behalf of his daughter. If a resolution is not agreed to within a week, the lenders may be forced to call Ellison’s bluff and throw their investment into Bankruptcy.
A spokeswoman for Annapurna issued the following statement regarding the financial stalemate: “The Ellison family is in negotiations to restructure their deals with the banks. They remain in full support of the company and are dedicated to Annapurna’s future.”
Consequently, Megan Ellison doesn’t appear to be thrilled with the public revelation of the company’s financial issues. She E-mailed the following to Annapurna’s staff this afternoon:
“Dear AP Team,
I got word this morning that there are some rumblings around town about our current status with the banks and that a story is likely to hit the press at some point today.
Restructuring deals with financial institutions is not uncommon, yet the process is usually handled without a spotlight on it. Fortunately/unfortunately, people like to write about me and my family.
That said, it is of tremendous importance to me that you all know we are as committed as ever to this company and are in full support of our future.
Regardless of whatever comes out in the press, the truth is that we are well on our continued path towards success. There will always be speculation, misinformation and personal jabs in the press – that’s part of the business.
But know, none of that matters to me. What does is your sense of security and protecting the special community and culture at Annapurna. I believe in what we make and have no intention of stopping any time soon.
We have a lot of exciting things on the horizon and I have no doubt all of our hard work will continue to show Annapurna’s unique and powerful place in this industry.
If you have any questions or want to talk, please do not hesitate to reach out.
Megan”
It sould be noted that Ellison has invested in his son David Ellison’s film endeavour, Skydance Media. That company has almost exclusively been a investment fund for Paramount Pictures (although it did flirt with distributing its own films for a hot minute) with hits such as “True Grit,” the last three “Mission: Impossible” installments, “Jack Reacher,” “World War Z” and “Star Trek into Darkness.” It’s also stumbled recently with bombs including “Life,” “Geostorm” and “Annhilation.”
Annapurna and UAR’s next release is Richard Linklater’s “Where’d You Go Bernadette,” which isn’t necessarily swirling with positive buzz, a week from Friday. It still has the Sundance premiere “Wounds,” which Netflix already released overseas, waiting to hit theaters. Annapurna’s upcoming investments include STX’s “Hustlers,” at one time an Annapurna production,and Miranda July’s “Kajillionaire.”
The one real bright spot for Annapurna the past year was Regina King taking home the Best Supporting Actress Oscar this past February. It shouldn’t be their only one. With companies such as Open Road, Broadgreen and The Weinstein Company folding over the past few years and 20th Century Fox’s assimilation into the Walt Disney Company there is a void in the market for a new distribution entity to find its footing. In theory, United Artists Releasing with MGM and Annapurna behind it should be that distributor, but if the banks call Larry Ellison’s bluff it may simply all go up in smoke.