Where movie studios see trouble, Red Granite Pictures sees opportunities.
The new finance and distribution company’s business plan is both contrary and simple: Make the films the studios don’t.
Among its first projects are Martin Scorsese’s “The Wolf of Wall Street,” which comes out Wednesday, and next year’s “Dumb and Dumber To,” the intentionally misspelled sequel to the 1994 comedy.
On the surface, those pictures don’t exactly seem like the sort that a major studio would cast aside.
But both were complicated projects, fraught with thorny issues. Red Granite’s founders, Riza Aziz and Joey McFarland, said they thrive in these sorts of scenarios.
“One of our sweet spots is movies that have died in the studios — movies that are just great product that everyone was hot on but for some reason or another just didn’t make it to the greenlight stage,” said McFarland, 41, a Louisville, Ky., native who is Red Granite’s vice chairman.
McFarland and Aziz, Red Granite’s chairman, started the West Hollywood company in 2009. That year, they began working on their first film, the comedy “Friends With Kids,” which came out in 2012 and grossed $12 million worldwide.
They were also executive producers on the recent drama “Out of the Furnace,” which was released in early December, and co-produced “Horns,” a Daniel Radcliffe-starring horror film that will be distributed by Weinstein Co.’s Radius label next year.
Red Granite, which has 12 employees, has eschewed a template for producing pictures. In the case of “Out of the Furnace,” the company acquired the project’s international rights from Relativity Media and then used its own in-house foreign distribution arm, Red Granite International, to sell the movie overseas.
On “Wolf,” Red Granite struck a deal with Paramount Pictures to have the studio distribute and promote the movie domestically for a fee. Red Granite sold the international rights to the film, mitigating the company’s downside risk.
“Every movie is different,” said Aziz, 37, who is the son of Malaysian Prime Minister Najib Razak. “We are very flexible in the model we [can] pursue.”
Red Granite raises money from a pool of undisclosed investors in the Middle East and Asia, and finances its movies on a one-off basis. The company is able to greenlight a picture without a distribution deal in place. But because it doesn’t have a fund it can tap, Red Granite must convince its investors that an individual project is worth the risk, rather than having the comfort of money to underwrite an entire slate.
That’s a tough business to be in, because one flop could scare off investors.
Graham King, the veteran producer behind such critical and commercial hits as “The Departed” and “The Aviator,” knows the travails of this business well. He produced Scorsese’s expensive 2011 3-D family film “Hugo,” which won five Oscars but struggled at the box office.
“That’s when I started paying attention,” King said. “The studios know what they are talking about. They take the occasional risk and they know what attracts an audience.”
“Wolf” is no “Hugo” when it comes to cost, but with a price of roughly $100 million, it wasn’t cheap. Red Granite paid for it all — a big bet for a fledgling company.
According to those who have seen prerelease audience surveys, “Wolf” could have a five-day opening run of $25 million to $35 million. That could be enough to beat out the five other films opening wide Wednesday — “Mandela: Long Walk to Freedom,” “47 Ronin,” “Grudge Match,” “Justin Bieber’s Believe” and “The Secret Life of Walter Mitty.”
The controversy of Prime Minister’s wife Datin Sri Rosmah Mansor’s recent trip to Qatar for the International Forum for Women Enterpreneurism IV using the Malaysian Government ACJ319 VIP jet 9M-NAA is still fresh on people’s mind. This is on top of the growing more commonly ‘market talk’ of her opulence lifestyle and extravagances.
Now, the attention is starting to train on her son Riza Shahril Abdul Aziz, Chairman and CEO of Red Granite Pictures based in Los Angeles. The former HSBC employee is now Tinsel Town’s media attraction, especially with the US nationwide screening of “The Wolf of Wall Street”.
Los Angeles Times story:
Red Granite picks up movies dropped by studios
Finance and distribution firm Red Granite Pictures raises money from a pool of investors in the Middle East and Asia, and finances movies on a one-off basis.
The LA Times story is very interesting. Riza and partner Joey McFarland venturing into film projects which major studios rejected. And they plan to do this three-four times in a year. The “A pool of undisclosed investors from Middle East” and “Able to green-light a picture without a distribution deal in place” bits are both intriguing and mysterious.
It is like having rich individuals or corporations with deep pockets to invest into projects and not knowing how the products would be accepted in the market and eventually sold. Almost like Riza and McFarland are able to get bets placed in a gaming scheme.
In normal circumstances bankers, investment fund managers and capital and commercial papers shufflers don’t get involved, buy in or punt their investments in these sort of high risk projects. People with money are usually very prudent, unless one is really a known and trusted personality to them.
Apparently, Riza who is an LSE graduate worked in KPMG and HSBC for not too long. Probably not long enough to be exposed in so many aspects of banking, capital market and consultancy. More importantly, to create a vast network of ‘high net worth individuals’ and earn their trust.
Then two years ago, he and McFarland formed a Hollywood picture company. They are interested to pick up on films which the major studios don’t want.
Then there is the jaw dropping damning story by Sarawak Report. This include the Raw Deal story of Los Angeles resident Riza’s New York apartment purchase exactly a year ago, which was signed at the value of at USD33.5 million.
Hollywood producer pays $33.5M for Park Laurel padRiza Aziz is working on Scorsese’s “Wolf of Wall Street,” but purchased on the Upper West Side
December 04, 2012 04:00PM
By Katherine Clarke
Riza Aziz and the Park Laurel spread
Up and coming Hollywood producer Riza Aziz may spend most of his time in Los Angeles, but he’s clearly serious about having a New York City pad. The 35-year-old Red Granite Pictures co-founder, and the son of Malaysian Prime Minster Tun Abdul Razak, has paid $33.5 million for a seven-bedroom home at the Park Laurel at 15 West 63rd Street, according to public records filed with the city today.
Aziz, whose company is currently producing Martin Scorsese’s “Wolf of Wall Street,” starring Leonardo DiCaprio, closed on the penthouse unit November 19, records show. The sellers were Peter Edward Chadney and Simone Cecile Von Graffenried Simperl, both residents of Switzerland. Neither of the parties could be reached for comment. An attorney for the sellers declined to comment.
It was not immediately clear if a broker had been involved in the deal, and the unit was not publicly listed. When Chadney and Simperl purchased the apartment in 2010, they worked with Janet Chang of Douglas Elliman. An assistant for Chang said she had not represented them in this deal.
The sellers purchased the apartment for almost $24 million in 2010, when it was listed by Raphael De Niro and Claudine De Niro of Elliman, according to Streeteasy.com. The De Niro group was not immediately available for comment.
The 15-room duplex has 7,728 square feet of interior space as well as a 1,244-square-foot terrace. It includes an AMX smart home system with integrated security control, solar window shades, sound proofing, heated marble mosaic floors in the bath and shower and a private elevator entrance.
Aziz, who reportedly makes his money as an investment banker, has been pegged as a producer to watch. He is one of a new generation of film financiers making their mark in Hollywood, according to a recent story in Variety. He also recently produced “Friends with Kids,” the 2011 movie starring Jon Hamm of “Mad Men” fame.
Even if only 50% of this is true, it is something which would be horribly manipulated against Prime Minister Najib and the current policy and exercise of ‘subsidy rationalisation’ where the Federal Government is growing unpopular with the recent retail price hike of petrol and diesel, total withdrawal of subsidy on sugar, the announcement of introduction of GST (even roll out is in 2015) and electricity tariff next year by 15%.
The speculation of increment of toll rates of many Non PLUS highways also seems to caused anger in many corners of community.
It is a mind boggling expensive proposition of starting a film producing company in an industry of performing arts and creativity. Then, getting investors and financiers to buy and bank in ventures which have no tangible assets as collateral.
On top of that, the purchase of that ultra expensive New York dwelling.
Riza Aziz is definitely living the lifestyle of the ‘rich and famous’. That would draw too much attention by to variable of curious, skeptics and suspicious tough critics against Prime Minister Najib and his family, on how the thirty plus man made his money, to even begin with as a film producer and entrepreneur in a highly volatile industry where he has no real control nor expertise.
The escalation of this story and there on reactions and justifications that would follow suit and probably entangled this further spiraling into a viscous cycle is something of a film script on is own. Probably Rosmah is obtuse about how many Malaysians even in affluent circles still talk if not believe her alleged involvement and/or knowledge to the murder of Mongolian national Altantuyaa Sharibuu seven years ago, the RM130,000.00 a piece Birkin and RM24 million ring.