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Quick Hits: Will Hollywood Take a Hit From Lehman?


Brief scrutiny of today's headlines.

Turmoil on Wall Street won't trouble movie production the way the Joker tormented Batman, but it may change the way films are financed.

The film industry won't feel an immediate pinch from Lehman's (LEH) bankruptcy filing or Bank of America's (BAC) planned acquisition of Merrill Lynch (MER), but Hollywood may have to look elsewhere for future financing, the Hollywood Reporter says.

Summit Entertainment and Marvel Studios (MVL) have established credit facilities with Merrill, and current interest rates will stand.

But things could change if the Merrill sale is completed.

The Hollywood Reporter, citing "one rival executive," says Bank of America could later exit from a $500 million production facility United Artists has with Merrill. The studio has only one film set for release in the immediate future: Valkyrie, starring Tom Cruise.

Merrill also has financing deals with Walt Disney (DIS). The contracts were signed before the deal with Bank of America was announced, however, and therefore will stand.

The Weinstein Company "is believed" to be seeking additional financing and may be turning to Asian sources after its Goldman Sachs (GS) fund draws to a close.

Lehman Brothers wasn't heavily involved in financing movies, but it did sign a deal with Warner-based (TWC) Alcon Entertainment.

The fallout from Lehman's failure is unknown in Hollywood and executives will just have to wait for things to play out. There's some fear that Lehman handled many high net-worth individuals who put money into individual movies.

"The double whammy of a company going under and another being swallowed up exacerbates the crisis," the Hollywood Reporter says. "And those effects may not just be financial: They could put more pressure on the movies that equity-and-debt-financed companies are releasing."

In recent years, Hollywood has churned out dozens of superhero movies. More than ever, it seems like a superhero is exactly what Wall Street needs.

To check out Minyanville's list of the 10 worst comic book movies of all time, click here.

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