MRC, Media Rights Capital, is quickly becoming the new model for production companies and talent agencies - a hybrid of financing, rights ownership and innovative packaging. Its rights’ model shares ownership equity with film talent, moving beyond the usual pay-or-play contracts. After the jump, we’ll dive into their recent formation, industry perspective and what their success means to the market. Upcoming MRC titles include:

• Brüno- $42.5 million from Universal, rights revert to MRC; received new R-rating instead of NC-17 yesterday
• The B Team - Will Ferrell+Mark Wahlberg action/comedy, rights to Sony
• The Adjustment Bureau - Matt Damon action/romance/sci-fi, $62M budget, rights to Universal for 20 years, then revert to MRC; 20% first-dollar-gross backend. The studio puts up P&A and gets worldwide distribution rights.

In an age of potential agency mergers - Endeavor and William Morris - where the model favors the top 2-5% of the talent pool, the creation of a new “financing” agency that aims to launch 10 films, 5-6 television shows, and 20 mobile or broadband shows annually is intriguing.

With their game-changing YouTube deal for Seth MacFarlane’s “Calvacade of Cartoon Comedy” to the films listed above, MRC is locking in deals with guaranteed distribution and unlocking their talent’s potential for more than gross points and other backend to actual ownership of the content, or IP (intellectual property), that they create.

Co-chaired and Co-CEO’d (pictured above) - a trace holdover of Hollywood organizational structure from Sony’s Guber-Peter regime - by Asif Satchu and Modi Wiczyk, the company was founded in 2003 with equity capital from investors including Goldman Sachs, AT&T and ad giant WPP (initially $425M fund).

At the end of September 2008, they impressively closed a new three-year, $350 million revloving credit facility with JPMorgan Chase and Comerica.

Respective backgrounds as the co-CEOs, or “New Medici” in the right sense of the words, are in their mid-30s, and we’ll be adding them to our Wikindex:

Asif Satchu built StorageNow, Canada’s third largest self-storage company. He also founded and led SMKT, a billion dollar supply chain management company. Mr. Satchu was an investment professional at hedge fund Tiger Management Company, private equity fund Westbrook Partners, and Morgan Stanley & Co. He is a graduate of McGill University and Harvard Business School.

Modi Wiczyk was a Partner at the Endeavor Agency, where he specialized in film & television finance, international sales and corporate advisory work. While at Endeavor he raised over $900 million of production financing for a wide range of film and TV projects. Prior to Endeavor, Mr. Wiczyk headed production at Summit Entertainment. He is a graduate of Harvard College and Harvard Business School.

Several articles have come out over the past two years on the origins of MRC - from its partial agency roots with Modi at Endeavor, to the way it sped the Bruno deal through Universal.

With enormous online interest in Sasha Baron Cohen’s latest mockumentary, the deal will likely prove sound, but questions of agency transparency and management control matter still arise; albeit it would appear the legal risks that Endeavor would take in subcontracting to MRC would outweigh the quick financing transaction. A few opinions in mainstream media:

Via Tilting Hollywood’s Balance of Power to Talent Agency Clients - New York Times:

Despite the new money and the seven Oscar nominations for Babel, the company has yet to convince a skeptical film business that it is not just a stalking horse for Endeavor and its clients. To expand its reach, Media Rights must overcome a widespread sense that the company is playing loose with restrictions on agencies employing their own clients or that it is somehow beholden to the agency that helped create it.

“Everyone who is not in the bus, we’re going to keep stopping by the house and opening the door,” Mr. Wiczyk said in an interview this month at the company’s office in the building that also houses Endeavor.

Via Kim Masters’ article for Slate:

Is MRC a separate company, or is it Endeavor in different clothing? It is against California state law for agencies to produce films, and Endeavor has said that MRC is a separate entity. But some in Hollywood perceive MRC as a unit of Endeavor—a unit positioned to cherry-pick projects. Former Endeavor agent Modi Wiczyk is co-CEO of MRC.

Further from the Times:

For us, financing opportunities are always exciting and interesting,” said Jeremy Zimmer, a partner at United Talent. Mr. Zimmer said that his agency has not done business with Media Rights, but might do so if it was satisfied that the company’s ownership and influences were clear. “What becomes critical is who is the management?” he asked. “What level of transparency are we going to have?

The carve out of a new financing entity-cum-production company is definitely a new beginning in Hollywood.

From an agency world becoming more and more dominated by mega-agencies like CAA and the possibility of an Endeavor/WMA combo, one always hopes (and sees in varying Oscar years in terms of awards going to the majors, then the independents) for indies, like MRC, to take advantage and be more nimble than the mainstream players.

“We get people comfortable; we get people to give us their information,” said Mr. Wiczyk, who described himself as being “evangelical” about using data to help artists seize the value in their own work.

Modi’s background connection to Endeavor is on many levels an example of talent offshoot (Modi leaving Endeavor to create MRC), which looks like MRC treating Endeavor as its parent agency - without the parent company’s talent restrictions - while being open to other agency transactions.

As we continue to watch MRC as an innovative example of financing with secured guarantees, distribution and ownership, their longtail rights control will redefine agencies, production companies and studio, in so much as owning film catalogs is a measure of being a studio.

Their rights and potential library growth, as well as creating new IP (think Seth MacFarlane’s control of merchandising for “Calvacade,” compared to his still-phenomenal Fox percentage with “Family Guy”), make this a great ownership pitch to the talent market at-large.

With agents trying to secure 360-degree talent deals while aiming for quantity over quality sometimes - see Jerry Maguire Revisited post - MRC’s employ of backend ownership with the ability to package finances and distribution instead of above- and below-the-line talent, changes the game.