What Happens Next for Megan Ellisons Embattled Annapurna Pictures?

“What will Larry do?” That was the question being asked around Hollywood on Wednesday afternoon, after news broke that billionaire Oracle founder Larry Ellison had stepped into the fray at Annapurna Pictures, the company created by his daughter, Megan Ellison, in an attempt to stem the bleeding caused by her slate of high-end, auteur-driven projects.

The past 36 hours have been a whirlwind for Annapurna. First, the production company announced it was bowing out of the untitled movie about former Fox News C.E.O. Roger Ailes, a mere two weeks before the start of production. Set to be directed by Jay Roach (Trumbo) from a script by Charles Randolph (The Big Short), and to star John Lithgow, Nicole Kidman, and Margot Robbie, the film is now being shopped to three different studios. That news coincided with a report that Annapurnas head of production, Chelsea Barnard, a longtime employee, had left her position, and that the company recently offloaded its high-profile, Jennifer Lopez-starring film, The Hustlers at Scores, to STX Entertainment. (One source said Annapurna abandoned the film a month ago after it couldnt sell off the international rights.)

These chaotic moves have caused people who are in business with 32-year-old Megan to wonder if their movies are still moving forward—and left others holding their breath, hoping that one of the few remaining outfits that finances challenging films doesnt go belly-up.

“I dont care how much money daddy gives you—you have to make something turn a profit,” said one producer, who declined to be identified. “Yet I applaud [Megan], and desperately want her to succeed. She hasnt made a single movie with a questionable filmmaker, and there arent enough people out there who are financing filmmakers. You could argue about how much shes spent, but nevertheless I have to applaud her.”

Two sources confirmed to Vanity Fair that Larry is indeed stepping in with a cash infusion for Annapurna, though the extent of his involvement remains questionable—as do rumors that Larry wanted the Ailes film shelved due to his close relationship with Fox mogul Rupert Murdoch. Variety reported that the tech billionaire will be orchestrating a major reorganization of Annapurna, with layoffs expected. The company disputed these claims. “Larry has been supportive and empowering of Megan as C.E.O. of this company,” said spokesperson Ashley Momtaheni. “His involvement has not changed since she founded Annapurna.”

Megan first made a name for herself in 2012, with the $45 million financing of Kathryn Bigelows Oscar-nominated Zero Dark Thirty, about the killing of Osama bin Laden. Since then, she and her company have backed projects from artists as diverse as Spike Jonze (Her), David O. Russell (American Hustle, Joy), Paul Thomas Anderson (The Master, Phantom Thread), and Richard Linklater (Everybody Wants Some!!, the upcoming Whered You Go, Bernadette), proving to be champions of prickly auteurs.

Things started to get “wonky,” as another producer put it, when Megan decided to expand her financing/production operation into a distribution and marketing entity in January 2017—a costly proposition that required her to staff up quickly and outlay big chunks of cash. The significant overhead, coupled with expensive employees, has proven challenging to the company, especially since none of the movies Annapurna has released in the past 18 months have been big moneymakers. Its one wide release, Bigelows Zero Dark Thirty follow-up, Detroit, proved to be a risk for the nascent label when it grossed only half of its $34 million budget. Yet insiders at the company insisted these are normal growing pains for a new film operation.

Its not helpful that Megan has proven to be a mercurial manager, sources said, one who is both passionate about her artists and challenging to work for. Filmmakers, though, couldnt ask for a more engaged partner, and are effusive in their praise.

“They all love her so much,” said Nina Yang Bongiovi, one of the producers of this summers Annapurna release Sorry to Bother You, from emerging voice Boots Riley. “If she were to go away, it would be a sad time for our business. When we were selling the film [at Sundance], she came in with a different approach. Its very anti-corporate, anti-studio, and thats really refreshing for artists.”

It might not be best for the bottom line, though. Yang Bongiovi recognizes that the risks Ellison takes are costly. “All of [Annapurnas] movies are hard,” she added, pointing out that Sorry to Bother You was one of the bright spots in the companys recent history (it grossed $17 million on a $3.2 million budget). “I dont know what they do internally, but they love auteur directors. Maybe thats not the best structure, but its best for the movie.”

Mark Boal, screenwriter and producer of Detroit, is also a believer in Annapurnas viability. “The distribution [business] is really tough, and the road is littered with failed distribution companies, but Megan is here to stay,” he said. “Shes a visionary and has great taste. It would be stupid to discount that.”

The company has high expectations for its upcoming slate. Its bullish about the awards potential for Oscar winner Barry Jenkinss Moonlight follow-up, If Beale Street Could Talk, which will debut on Nov. 30, and Adam McKays Christmas Day-opener, Vice, starring Christian Bale as former vice president Dick Cheney. More commercially, Annapurna is a co-distributor of MGMs Creed II, which stars Michael B. Jordan and opens Nov. 21, and Laikas upcoming animated film, Missing Link, opening in April. It will also co-distribute the next Bond film, Bond 25, but that wont happen until 2020.

Until then, two sources close to Megan said she is taking a hard look at her upcoming roster and is likely to decrease spending on individual films. Its an unwelcome proposition to filmmakers, but if it keeps the fledgling studio in business, theyll take it. After all, Megan Ellison is one of the few Hollywood financiers willing to make tough bets.

Get Vanity Fairs HWD NewsletterSign up for essential industry and award news from Hollywood.Nicole SperlingNicole Sperling is a Hollywood Correspondent for Vanity Fair.

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