Mumbai: In a landmark deal, Uday Shankar, chief executive officer of Star India, and film director Karan Johar have inked a three-year production and distribution deal in which Fox Star Studios, Star’s studio vertical will join hands with Johar’s Dharma Productions to co-produce and distribute nine films in a deal which is estimated to be worth Rs 500 crore.
The nine films, boast Dharma Productions’ blockbuster directors like Karan Johar, Ayan Mukherjee, Karan Malhotra and Abhishek Verman, among others, toplined with stars like Ranbir Kapoor, Aishwarya Rai, Shahid Kapoor and Alia Bhatt, among others. The Star TV network will also be roping in Johar into a much larger creative role.
“It was time to scale up for Fox Star Studios and deepen our presence and reset the dial, creatively and commercially,” said the CEO of Star India – Uday Shankar.
With the industry reeling from huge losses, big budget films failing and negative growth, closing a deal of this size has taken over six months, according to industry insiders, and has had other studios too vying for the deal. According to the deal, some films will be a co-production between Fox Star Studios & Dharma Productions and others will be pure distribution. Revenues are usually split equally on co-production, while on distribution they are on commission, which varies between 10-12.5%.
“I believe in relationships, bonds and vibes, and I connect with people. If I like them, I want to work with them which was the case here. For the rest, I left it to my CEO, Apoorva Mehta, who is the business brain and backbone of this deal. Unlike what people believe, collaborations don’t dilute brands, in fact this is a profile and power deal, which we hope will bring back the falling footfalls to cinema halls,” said Johar, who feels the industry is going through a crisis and an infusion of good content, screenplays and scaling up new talent is what is the need of the hour.
Dharma’s chief executive Apoorva Mehta adds it is by far the biggest collaboration that the Indian film industry has ever seen, specially given the roster of talent that Dharma is bringing in. “With this strategic deal, Dharma has entered into a new phase of movie business which will provide a disruptive growth model for all the parties involved. It looks like the beginning of a game-changing era for the industry,” said Mehta.
While Fox Star Studios has not seen much box office success in their last few films, specially with their last release, Anurag Kashayp’s Bombay Velvet, which failed, they bring in global distribution muscle which could add as much as a 25% incremental to a film’s overseas collections. In fact, Fox Star Studios began their Bollywood journey six years ago, with Karan Johar’s My Name Is Khan (MNIK), which was the first Indian film to open new markets in Europe and the Far East. It was in fact, released in 2010, across 60 countries and opened up many new markets and did a record Gross Box Office of $23 million in 2010.
“This strategic alliance envisages the stakeholders pooling in their collective strengths and thereby chalking a new path for Bollywood, specifically in the way in which films are marketed and distributed. Consolidation through strategic alliances is the way forward in the film industry,” said Vijay Singh, CEO, Fox Star Studios.
For Star chief Uday shankar it is a rare deal, as globally, he adds, the company does not get into such collaborations. It is the cross pollination between two creative forces which will see new horizons first on television, a prospect Uday Shankar is excited about.
Star broadcasts more than 40 channels in seven languages, reaching more than 720 million viewers every week across India and 100 countries.