The Cork film studio behind Sgt Stubby: An Unlikely Hero, an animated production about a dog that became a first World War US army sergeant, is in talks for a debt-for-equity swap with its Irish and US financiers after box office sales in America disappointed.
Fun Academy Media Group, which produced the film last year featuring Helena Bonham Carter and Gérard Depardieu, is in talks to give investors shares in the Stubby The Movie Limited, the entity that controls worldwide rights.
The Cork film studio raised about €3 million from Irish investors and a further $5 million from film financiers in the US, but Stubby has not yet made enough cash to pay them back.
Accounts recently filed for Fun Academy say American box office revenues, which were supposed to cover all repayments to US investors, totalled just $4.2 million because "big studios' demand for screens" crimped Stubby's exposure.
It predicted, however, that international sales would be strong. The studio expects to make $1 million in 2019 from DVD sales, with a further $750,000 from a cable deal. The film is also being released in Spain, Portugal and France.
“This extra revenue is required to satisfy all debt obligations,” noted Fun Academy’s directors, before predicting a “100 per cent take up” of the Stubby The Movie debt-for-equity proposal.
Fun Academy group shares are not part of the equity swap proposal.