Home Box Office has agreed to acquire the long-term pay TV, pay-per-view and home video rights to films produced by Savoy Pictures Entertainment, the new movie company created by former Columbia Pictures Entertainment executives Victor A. Kaufman and Lewis J. Korman.

Savoy could receive more than $500 million in production funds under the agreement, while Time Warner’s HBO will receive the rights to 48 Savoy films over the next four years.

Savoy said the films made under the HBO agreement will cost about $20 million each, bringing the total production budget to $960 million. The HBO deal, which is geared to how well the films perform at the box office, could cover more than half the film’s production budget.

Selling off the pay TV and home video rights before the movies are made--known as “output deals”--became popular in the 1980s as a way of offsetting increasingly costly film production.

In addition to helping Savoy finance the cost of films, HBO will have a say in what films are made.

“We expect to work hand-in-glove with Savoy in this operation by looking out for projects and helping in any way we can,” said Steve Scheffer, HBO’s executive vice president of film programming.

Savoy Pictures was formed last February with $100 million in start-up funds and the support of such financial powerhouses as veteran Hollywood player and New York investment banker Allen & Co., Chicago’s Pritzker family and Dan Lukfin of Donaldson, Lufkin & Jenrette.

At the time, Savoy executives said they would strike up relationships with international TV networks and cable channels in addition to helping filmmakers obtain loans and arrange pre-sale agreements as a way of financing movie production.

“This deal puts our company on the same playing field with the six other major movie studios,” said Savoy President Lewis Korman. He said the HBO agreement enables Savoy to be a serious bidder when it comes to competing for projects and negotiating with producers, directors and talent.