The lion behind Lionsgate is back for a sequel…

April 10, 2012
Posted by: Leslie Wootton

News that half of Blade Runner franchise was for sale thrust Frank Giustra back into the movie business

Financier and philanthropist Frank Giustra’s recent splashy return to the entertainment industry was no scripted affair.

“It was not a deliberate decision,” Giustra said. “It’s happened and I’m very happy I did it, but was I thinking a year and a half ago, ‘I’m getting back into entertainment?’ It didn’t work that way.”

Giustra, who founded Lions-gate Entertainment in Vancouver in 1997 and left the company in 2003, dramatically re-appeared on the entertainment scene just one month ago after investing an undisclosed sum to become a major share-holder in Vancouver’s small but solid Thunderbird Films. Two weeks later, Thunderbird announced Sea to Sky Entertainment, a partnership with Lionsgate to create television programming for broadcast and cable networks. Days later, Thunderbird opened a new office in L.A., and barely a week after that, Lionsgate’s dystopic movie Hunger Games opened to a staggering $214-million global debut weekend, followed a week later by Thunderbird picking up a Digital Emmy in Cannes for Endgame.

Yet this fast-moving confluence of timed events started quietly, not with sophisticated market analyses or financial fortune-telling, but with the very personal, emotion-laden pull of esthetic appreciation – Giustra’s appreciation for the 1982 cult classic, Blade Runner, to be precise.

“I love the movie,” said Gius-tra who once contributed $31 million to his friend Bill Clinton’s charitable foundation and has been deeply involved in philanthropy ever since. “It’s a story about what life is all about. What is life and who gets to judge what life is worth?”

When Giustra’s longtime friend, Thunderbird CEO Tim Gamble, told him that half the Blade Runner franchise was for sale, Giustra was overwhelmed. “I thought ‘Wow,’ ” Giustra said in a recent interview, drawing out the almost whispered word to emphasize his awe. ‘Really? We can own half of this?’ “

So a year-and-a-half ago, Giustra quietly invested in Thunderbird and Thunderbird bought into Blade Runner. At about the same time, Lions-gate – named after Vancouver’s iconic bridge – was fighting a proxy battle and Giustra accepted an invitation to rejoin his old friends as a board member. “Pretty soon we were having conversations about TV,” Giustra said, “and the next thing you know,” Sea to Sky Entertainment – named after the Vancouver/Whistler high-way – was born.

“The bigger things in life just happen,” said Giustra, 54. “I have found that my life was a series of accidents.” His meeting Bill Clinton and the start of his investment banking career were serendipitous, chance events, said the former chair-man of Yorkton Securities and the current president and CEO of Fiore Financial Corporation.

But if Giustra got started on this recent journey through love, he’s certainly not entered it blindly.

His relationship with the entertainment industry pre-dates Lionsgate by more than a decade when he started Inter-national Movie Group to sell the foreign rights to North American films, and in the last quarter of a century, he’s learned a thing or two about the business, such as how to diversify and how to partner. “This entire industry is about risk management,” he said.

Television markets are growing exponentially “from Wal-mart to Netflix,” and with emerging markets such as China and India, he said. There are Internet players, pay-TV services, mobile platforms.

Giustra’s return on investment will come from creating a library, he said. “Our whole objective will be to own con-tent,” Giustra said. “Owning the underlying rights. That’s where the value is.”

TV series bring economies of scale.

“The same amount of work goes into producing one movie and a series, but the series can run one, five, six years,” Gamble said. “We’ll be shooting this year, our 70th episode of Mr. Young.” High-end dramatic series with global appeal and a long shelf life are the target, Gamble said.

But with owning content, the barriers to entry are steep. Partnering with both Vancouver and international production companies creates lever-age and reduces risk. The access to Giustra’s capital and the Lionsgate connection catapults Thunderbird into a stratum previously unseen in Vancouver. The company now has enviable access to high-end creative talent, and clout when approaching TV buyers, Gamble said.

Giustra believes the company will succeed because Thunder-bird president Michael Shepard and Gamble have years of successful experience and know “how to partner and produce content efficiently and inexpensively.” In a notoriously profligate industry, Giustra values Gamble’s preference for standby flights and Skype phone calls. “He told me once what he paid for a trip to L.A., I couldn’t believe it,” said Giustra.

Even the Blade Runner purchase is about accumulating content.

“It’s really like owning a very fine piece of art and Frank is an art collector,” Gamble said. But unlike fine art, franchises bring a return through additional feature films, video games, TV series and merchandise. “Imagine owning Star Trek,” Gamble said.

Giustra intends to continue investing capital into Thunder-bird. “It’s not the type of business you just put in your seed capital and it blossoms on its own,” he said. He sees his role as largely in finance, strategic growth, acquisitions, and of course, his ability to broker relationships. “I’m a very patient person,” he said. “Five years from now or seven years from now, this could be a very interesting company.”

“Frank is about timing,” Gamble said.

“When he started Lionsgate and decided to get out and start his investing in the resource sec-tor, the timing was amazing.” A year ago, Lionsgate “was fighting with a disgruntled share-holder and was half the value. Had we been doing what we’re doing a year ago, it wouldn’t have had the same impact.”


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