The credit crunch shaking world markets has hit Hollywood after Goldman Sachs and Deutsche Bank, which were trying to raise up to $1bn to finance films for Metro-Goldwyn-Mayer, withdrew their offer to underwrite the deal.

Editor’s note

Some internet versions of this story incorrectly included an MGM stock ticker symbol next to the name of the Metro-Goldwyn-Mayer studio. There is no affiliation between the privately held MGM studio, the subject of the story, and the MGM Mirage gaming company of Las Vegas, which trades under the New York Stock Exchange ticker MGM.

Bringing in private equity, hedge fund and institutional investors to fund “slates” of several films has become a popular way for Hollywood studios to spread the risk attached to production.