Apple and Skydance Megadeal are one of Hollywood’s richest deals
New details surrounding the union of Apple Studios and David Ellison’s Skydance Media prove the tech giant is willing to spend big to build a sprawling global movie business, sources say Variety.
Nearly a month after it was announced that Apple had landed a slate of live-action films from Skydance, longtime partner of Paramount Pictures, producer of the mega-franchise “Mission: Impossible” and the upcoming sequel to “Top Gun,” the town is still abuzz about the lucrative, rarefied deal Skydance has carved out for itself.
The deal looks a lot like a “put deal,” sources say, an increasingly rare Hollywood arrangement in which a distributor is obligated to release whatever films their partner chooses (Jason Blum’s Blumhouse, Jordan Peele’s Monkeypaw and New Arnon Milchan’s Regency are some of the actors who have commissioned similar pacts).
While not unprecedented, industry watchers say Skydance’s deal with Apple is one of the richest a production company has received. Under the terms of the pact, Skydance is guaranteed at least two fully funded feature films per year with budgets up to around $125 million, multiple insiders familiar with the matter have said. Skydance is also guaranteed a payout of up to $25 million per picture, depending on the budget threshold. That money compensates Skydance for the profits it theoretically would have reaped had the film been a conventional box office hit. Movies Skydance releases for Apple are not guaranteed to be released theatrically.
Under the terms of conventional sales deals, Skydance could theoretically put a movie into production and force Apple to fund and release, though that’s extremely unlikely. It would put unnecessary pressure on the alliance by essentially handcuffing Apple to a movie it didn’t want to make. In the past, companies with “sales deals” usually ensured that any films they made had the enthusiastic support of their distribution partner.
Apple’s creative executives, including Skydance deal leads Jamie Erlicht and Zack Van Amburg and feature chief Matt Dentler, will work to identify which films on Ellison’s list will be eligible for the two-picture minimum. To sweeten the pot, Skydance will retain copyright to all intellectual property it produces at Apple. The two parties will split downstream revenue, and the arrangement leaves room for additional profit sharing for Apple, sources said.
Apple was seen as a likely landing spot for Skydance when its first look pact with Paramount expired. In 2021, Apple and Skydance Animation announced that they would be embarking on a series of animated films together, a sign of their deepening relationship.
Still, the financial details of the pact with Skydance’s feature arm arm surprised some industry watchers because Ellison, the son of billionaire Oracle founder Larry Ellison, doesn’t have to capitalize his own films. When the tech scion first landed in Hollywood, he was seen as a major fundraiser, but he’s been working to bolster his creative chops. Ellison has developed successful films such as “The Old Guard” and “The Tomorrow War” in recent years. He also oversaw some commercial misfires, such as Ang Lee’s costly flop “The Gemini Man” and the relaunch of the Terminator series with two sequels in 2015’s “Terminator: Genisys” and 2019’s “Terminator: Dark Fate.”
Representatives for Apple and Skydance Media declined to comment on the matter.
The Cupertino, Calif.-based company won Skydance in a battle against its staunch competitors, including Amazon Studios and Netflix. Its most formidable opponent was Amazon Studios, whose biggest streaming movie “The Tomorrow War” comes courtesy of Skydance. They also collaborated on Michael B. Jordan’s action movie “Without Remorse.”
While Skydance is still free to develop film projects with other distributors, the partnership goes a long way in redefining a cinematic strategy at Apple. For the past three years, Apple TV Plus has followed the pattern of acquisitions established by its streaming predecessors – picking up indie fare like “CODA” for a check-in exceeding $25 million at the 2021 Sundance Film Festival. But most of his films have been more artistic offerings such as Joel Coen’s “The Tragedy of Macbeth” and Sofia Coppola’s “On the Rocks,” both of which were made through an alliance with indie player A24.
There are notable populist exceptions – including the Tom Hanks films “Greyhound” and “Finch”, but these were made by Sony and Universal respectively and acquired during the pandemic. Now, Apple seems to be signaling that it plans to use its formidable stockpile of cash to make more appealing movies. Internal production of more ambitious films has also ramped up over the past 18 months, including Will Smith’s rich ‘Emancipation’ package, an original Christmas musical from Will Ferrell and Ryan Reynolds, and a $200 million pact. dollars for Matthew Vaughn’s spy thriller ‘Argyle.