Oracle founder Larry Ellison is engineering a major reorganization of his daughter Megan Ellison’s struggling Annapurna Pictures, according to several people familiar with the situation. The studio has been hemorrhaging money for years and continues to suffer an exodus of top executives who have either been forced out or who left on their own accord. The latest casualty, film president Chelsea Barnard, was fired this week.
Since launching seven years ago, Annapurna quickly established itself as a favorite production company among auteurs, backing films of critically beloved directors such as Kathryn Bigelow, Paul Thomas Anderson and David O. Russell. It developed a reputation for being immune to the kinds of financial challenges and volatility that many other indie companies have faced. The reason, agents and artists point out, was that it has continued to benefit from the deep pockets of Megan’s billionaire father. Both she and her brother David (who runs Skydance) had the advantage of readily available funds when they each launched their companies.
While Skydance is currently on solid financial footing, Annapurna is another story. The company has racked up hundreds of millions of dollars of losses over the years, due to some significant box office misses, including last month’s release of the John C. Reilly and Joaquin Phoenix Western “The Sisters Brothers,” on which the studio was a participant. The film cost close to $40 million to produce and has only grossed $757,000 to date.
“These are good artsy movies that lose a ton of money,” says one person familiar with the company’s financials.
Consequently, Larry Ellison is taking a hard look at costs to figure out a way to overhaul the operation, two individuals familiar with the company told Variety. The Oracle founder, who is worth $60 billion, is enlisting outside advisers to pore over Annapurna’s books and try to establish a way to push the company into profitability
An Annapurna spokesperson later added, “Larry Ellison has been an advisor since day one and has fully empowered Megan as the CEO of the company. His involvement has not changed since she founded Annapurna.”
His oversight has alarmed top filmmakers and left Hollywood panicked that yet another backer is on the verge of collapse. But sources say Ellison is continuing to invest in Annapurna and has no current plans to shutter the operation, according to sources.
“Larry refuses to lose another dollar in the venture,” said a knowledgeable insider, adding that pricey executive leadership across divisions and even rent at Annapurna’s West Hollywood headquarters adds up to considerable overhead. Megan’s spending has long been a concern for her dad, the individual said.
When asked why the heavy spending has gone on so long, the insider simply said: “Have you ever seen a parent with their kids?”
Annapurna’s move into distributing its own films with 2017’s “Detroit” has been a financial disaster, one that has cost the company tens of millions in losses and has required infusions of cash from Larry Ellison — financing that some claim has come with strings attached. Megan Ellison had become frustrated at a lack of control over the roll-out of Annapurna productions, and moved aggressively into the distribution space despite warnings from industry figures who cited the significant financial risk involved.
In short order, Annapurna offloaded two prestige pictures to rival studios, the Jennifer Lopez drama “The Hustlers at Scores,” which has been acquired by STX, and a drama about Fox News founder Roger Ailes’ sexual harassment scandal that will star Nicole Kidman, Charlize Theron, Margot Robbie and John Lithgow. The film was two weeks from starting production before being dropped, and is expected to land at Focus Features with co-financing from Bron Studios.
Chatter among agents says that Larry Ellison, a Republican, was hesitant to back the Ailes film because he is personally close to Fox chief Rupert Murdoch. Even if that is not the motivation, Annapurna insiders have gotten the sense that Larry Ellison is not interested in putting his money behind politically charged material. One person who knows Larry Ellison says his concerns are purely financially driven and that he determined that the economics of the Ailes film, as well as other projects, didn’t add up.
A rep for Larry Ellison did not immediately respond to requests for comment. Annapurna declined to comment.
At the same time, the company decided in May not to make “True American,” a drama from Chilean filmmaker Pablo Larrain that was set to star Amy Adams, and has been seeking a co-financier on “Vice,” its $60 million Dick Cheney biopic. The studio also put the brakes on the comedy “Guilty,” even as Kevin Hart was attaching himself from a script by Jerrod Carmichael, with budget concerns again the reason the project was put on the back burner. An Annapurna insider disputed money concerns, instead citing script issues.
While several people said Megan Ellison, considered a mercurial figure, has been missing in action this week as chatter grows louder that the studio was in the midst of a financial crisis, another company insider insists that she has been stabilizing the film unit, speaking with filmmakers and visible in the office.
As her father assumes greater oversight of Annapurna, filmmakers who have projects set up at the studio are growing concerned. The studio has Barry Jenkins’ “If Beale Street Could Talk” scheduled to open Nov. 30; “Destroyer,” starring Nicole Kidman, on Dec. 25, and the Richard Linklater film “Where’d You Go Bernadette?” debuting next March, although there are mutterings that production has been strained. Other than those two films, the studio had no other films make it into production.
Annapurna is hoping that its distribution joint venture with MGM will help improve its financial picture. Its upcoming boxing sequel “Creed II,” starring Michael B. Jordan, is expected to score with audiences when it bows in late November and Annapurna is optimistic about Bond 25, the 007 sequel for which it beat out several major studios to grab domestic distribution rights. However, the Bond movie is not scheduled for release until Valentine’s Day 2020.
Annapurna earns a distribution fee for the Bond film, but had to make certain concessions to get the deal. Namely, the studio’s title card will not appear in front of the film. A source close to Annapurna said that is true of all MGM titles released under the distribution pact and helps with branding. Should Annapurna find itself unable or unwilling to release the new Bond, the film’s international distributor Universal would be a likely candidate to release the film.
Annapurna is expected to enact layoffs as part of this reorganization. However, the studio is also going to make certain strategic hires as it tries to piece together a more profitable slate.
Justin Kroll contributed to this report.
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