Terminator falls into hedge fund hands

The mess of legal spaghetti that is the rights to the Terminator franchise had threatened to become a bit more straightforward this week, as the auction for those rights drew to a conclusion yesterday. However the sealing of the deal has vomited up more questions than answers, as sellers Halcyon Holdings accepted a deal from Pacificor, the hedge fund who triggered the auction in the first place.

Deadline Hollywood revel in the scheming and wrangling that goes on in Tinseltown's blood-splattered corridors of power, and they have been trailing this fishy saga with bloodhound persistence in recent months. So unsurprisingly DH was on the spot yesterday when the five-hour auction for the Terminator rights was finally wound up in the Los Angeles offices of FTI Capitol Advisors, the firm hired by Halcyon last September to help them maximise their revenue streams when their squabble with Pacificor forced them to file for bankruptcy.

The sale, which was for rights to Terminator movies, TV shows, and other ancillary spin-offs, apparently kicked off at 3pm and wrapped up at 8. The main bidders involved were the ultimately-successful Pacificor, Sony, and Lionsgate (who had reportedly placed a benchmark $15m bid for the rights back in January). After the first round of bidding, Sony and Lionsgate pooled their resources and went head-to-head with Pacificor, before finally admitting defeat when it became apparent that the Santa Barbara-based hedge fund was, in the quoted words of one insider, “willing to pay almost any amount of money for Terminator”.

The final price tag for the rights was $29.5m (coincidentally just $0.5m short of the precise amount Halcyon had demanded from Pacificor in a lawsuit accusing the latter of bribery, extortion and fraud), with the deal allegedly leaving thwarted Sony head honcho Peter Schlessel throwing his toys out of the pram like a big, angry baby who needs his poop-laden nappy changing (to put a slightly colourful spin on the rumour that he stormed out of the FTI offices in a huff once it became apparent his studio was going to miss out).

Halcyon acquired the Terminator franchise rights back in May 2007, from previous holders Andy Vajna and Mario Kassar, the veteran producers behind Carolco Pictures. Best known for its rugged, explosive action product, Carolco scored its biggest-ever hit with James Cameron's Terminator 2: Judgement Day, before going belly up in 1996 when it staked nearly $100m on Renny Harlin's Cutthroat Island and got just over $10m back at the box office. Vajna and Kassar subsequently formed C2 Pictures, with the primary intention of reviving the Terminator franchise, and this ambition was fulfilled when they served up (the really rather rubbish) Terminator 3: Rise of the Machines in 2003.

The rights to the series were sold to Halcyon for a reported $25-30m, with Pacificor providing Halcyon owners Derek Anderson and Victor Kubicek with the requisite cash to complete the transaction. Halcyon produced last summer's less-than-beloved Terminator Salvation, before their dispute with Pacificor forced them into bankruptcy, and put the franchise rights back on the market. While the $10,000 put up by Buffy creator Joss Whedon was never likely to prove to be the winning bid, the final price of $29.5m seems to have been less than was expected - certainly given that Kevin W. Schultz, the senior managing director of sale-overseers FTI, was saying this just last autumn: “Based on our extensive due diligence, we believe the value of the Terminator franchise alone is substantially greater than the $30m Halcyon paid for it in 2007.” Guess again Kev.

Halcyon also possess the first-look rights to the brain-frying work of science fiction writer Philip K. Dick, but there is no word as to what has become of that particular asset. However a further fire sale seems unnecessary, given that the deal struck between Halcyon and Pacificor over the Terminator rights apparently guarantees that:

1.Halcyon will receive $5m for every future Terminator movie

2.Halcyon will retain their revenue streams from the third and fourth Terminator movies

3.Halcyon's debt to Pacificor will be er, terminated

Have Pacificor got a good deal? Have Terminator fans got a good deal? Are there any Terminator fans left out there after Salvation? Personally, this writer thinks those hedge fund whizzes at Pacificor could have saved themselves a few quid and just come up with their own, completely original, relentless, robotic movie monster. Something like... the Exterminator. Or the Killinator. Or the Deadenator.