Hollywood Hit By U.S. Banking Crisis

Hollywood Will Have To Start Downsizing

July 16. 2008

Optimus Sub Prime

Hollywood is feeling the crunch from the banking woes happening in America. Spielberg and DreamWorks had to borrow money from abroad. Warner Bros. shutdown some of its film companies. Now comes word that Paramount had to suspend a $450 million dollar financing deal. Films like "Transformers 2" are in jeopardy.

Transformer actress Megan Fox

Paramount forced to suspend $450m financing

The credit crunch has hit home in Hollywood after Paramount Pictures, which has released a string of hit movies this year, was forced to suspend plans for a $450m film financing.

The studio has been working with Deutsche Bank on financing that would have provided funds for up to 30 films, including possible blockbusters such as the sequel to Transformers and a new version of Star Trek.

However, the bank was unable to close the financing because of a market-wide lack of enthusiasm for the deal’s senior debt component. Deutsche has subsequently decided to close its film finance unit and concentrate on other areas.

http://www.ft.com