IDW Media Holdings, including IDW Entertainment, IDW Publishing and CTM Media Group announced that due to IDWE production costs and necessary operating cost, the company has taken financing from Chairman, Howard Jonas.
Flat performance in the second half of 2018 at IDW Publishing and CTM inhibited IDWE’s ability to draw upon sister divisions for needed cash.
Jonas provided a $5M loan to the company in August. He also made available a $26M bridge loan in November. As of December 18, IDWM had borrowed $23M of that loan. IDWM is required to repay $11M no later than December 31. The loan matures on January 31, subject to the company’s right to extend for three months.
Recently, the company faced management changes with IDWE’s President, David Ozer, departing in August 2018, and IDWP’s President and Publisher, Greg Goldstein, stepping down this month. IDWP’s former Chief Creative Officer and Editor-In-Chief, Chris Ryall, returned to the company as President, Publisher and Chief Creative Officer in early December.
IDWM anticipates the need for further funding, and the company is planning to raise capital from existing stockholders by way of a private placement memorandum that will include the offering terms.
Challenges that led to IDWM’s need for a cash infusion included:
- Specific projects at IDWE:
- “October Faction”: Bank financing for this Netflix Original series being produced by IDWE was delayed. As well, the show is experiencing meaningful cost overages. Further, the project currently lacks additional revenue streams due to territory windowing;
- “Wynonna Earp”: Based upon renewal options exercised by SyFy Network, IDWE has been self-financing production costs for seasons four and five (each 12 episodes) of this award-winning series. IDWE is seeking foreign sales to recoup its anticipated net investment; SyFy Network’s license fees for domestic rights only cover approximately half of IDWE’s costs;
- “V-Wars”: This upcoming Netflix Original series, featuring Ian Somerhalder, may need additional post-production investment prior to delivery in early 2019;
- “Locke & Key”: Based on Joe Hill’s Eisner-nominated book series, IDWE produced a pilot for $13.6 million in anticipation of licensing to Hulu. Subsequent to the pilot production, Hulu passed on greenlighting a season and IDW incurred non-reimbursable expenses associated with the pilot. Netflix has since acquired worldwide rights to season one and the show is expected to commence principal photography in early 2019.