It’s a bold and impressive lineup–and already the publicrelations skirmishes over Paramount’s prospects have begun. Last week, when Paramount announced that the reported $48 million Eddie MurphyNick Nolte sequel “Another 48 HRS " grossed $19.4 4 million its first weekend, other studios hinted to Variety and the Los Angeles Times that Paramount had exaggerated the take. “Jealousy from the competition,” shot back one Paramount exec, who says the film has already brought back $20 million in rentals to the studio. “We have without question the kick-ass schedule of the year,” says Paramount film group head Sidney Ganis. A few Hollywood insiders also whisper that Ganis, an affable ex-marketing chief and top aide to George Lucas who only started “green-lighting” features 16 months ago, may know less about making movies than selling them-a charge he dismisses by pointing to an Emmy for documentary-film production. “It’s going to take [Ganis] time to learn the job,” says one agent. “The problem is he’s learning it during the Tet Offensive.” Tet Offensive is right: it’s war out there. As Paramount and the other top studios gear up for the long beach season, they’re battling one another at the box office with an unprecedented stampede of $30 million to $60 million movies, including Disney’s “DickTracy,” Tri-Star’s “Total Recall” and Orion’s “RoboCop II.” To improve the odds of worldwide success, studios are ponying up ever larger sums for special effects and a handful of stars with global appeal: Eddie Murphy and Arnold Schwarzenegger each commanded $9 million to $10 million for their current films, plus a chunk of the gross profits. Hot director Renny Harlin, who made “Nightmare on Elm Street IV” and Fox’s upcoming “Die Hard 2,” reportedly was offered $3 million to make “Gale Force.” The surge in spending has even benefited the lowliest members of the creative team: screenwriters. Action-adventure scripts that might have gone for $300,000 a year ago are being sold to well capitalized independent producers and studios at auction for $1 million. Says Scott Rudin, former Fox production chief who has a lucrative deal with Paramount: “Everybody’s hungry for the big ’event’ movie.”
Hollywood trends are cyclical, and if a couple of big films bomb like “Heaven’s Gate” in 198O, the conventional wisdom could shift back to the “small is beautiful” mentality that followed “Rocky” in the mid-1970s. But a new element is fueling the current money wars: there’s a lot more cash to be made. Domestic ticket sales surged from $4.46 billion in 1988 to $5.02 billion in l989. An unprecedented three films grossed $100 million before the summer season, including “The Hunt for Red October,” Disney’s “Pretty Woman” and New Line’s “Teenage Mutant Ninja Turtles.” The studios collected $3.37 billion from U.S. video revenues and $1.7 billion in network TV money. Thanks to that and the explosion of the international movie business, worldwide revenues totaled $11.6 billion-double the 1984 figure. According to the media analysis firm Paul Kagan Associates, that number could grow to $19.2 billion by 1994.
Further jacking up prices is the surge of foreign investment, which has catalyzed new production and brought changes to Hollywood’s executive suites. Italian financier Giancarlo Parretti, who bought Pathe Entertainment (formerly Cannon) in 1988, is now negotiating to purchase the near moribund MGM/UA Communications Co. for $1.2 billion. If he succeeds, Parretti plans to inject an additional $200million for a new slate of big-budget pictures. Japan’s Sony bought Columbia Pictures for $3.4 billion in 1989 and installed former Warner Bros. producers Peter Guber and Jon Peters (makers of “Batman”) as the best-paid studio chiefs in Hollywood: $2.75 million yearly salaries, a $50 million signing bonus plus a $54 million payment for their production company. Guber and Peters immediately began spending millions commissioning new projects. Producer Lawrence (“Die Hard”) Gordon got $100 million from Japan’s JVC Entertainment Inc. to form a production company, Largo Entertainment. Morgan Creek Productions, makers of “Major League,” got a reported $100 million from a division of Nomura Securities, the Tokyo-based investment firm, and expects to release eight to 10 movies this year. Carolco Pictures Inc., producer of “Total Recall,” just received $60 million from Pioneer Electronics for a 10 percent stake.
As studio demand grows for big-budget movies with international appeal, power in Hollywood has solidified around those who make “event movies” happen: the producers who package projects with stars and deliver them to the majors; the agents who feed the producers “hot scripts,” and the studio marketers who sell the movies to the public. Here’s how the block buster business works:
The producer game At the center of the hit machine are a handful of major “players”: producers with a proven track record of box-office smashes and powerful “relationships” with stars and studios. Gone are upstarts like Cannon and the De Laurentiis Group that went bust trying to market and distribute movies outside the studio system. Most of today’s power brokers make mainstream movies using studio money. They include “Terms of Endearment” director James Brooks (who just signed a seven-year exclusive deal with Columbia that could give him $100 million to make movies And TV shows) and Don Simpson and Jerry Bruckheimer, the flamboyant team behind “Top Gun” and “Days of Thunder.” Their exclusive five-year deal with Paramount reportedly lets them produce and/or direct five “put movies”- free of supervision-as long as costs don’t escalate way beyond the $23 million industry average. There are also a few wellcapitalized independents like Castle Rock (cofounded by Rob Reiner) and Imagine, which develop scripts and provide some financing but rely on big studios for marketing and distribution. “We’re all looking for [mainstream] product to feed our massive global distribution systems,” says Tom Pollock, chairman of Universal’s motion picture group.
Brian Grazer, who runs Imagine with partner Ron Howard (former star of “Happy Days” and director of “Parenthood”) exemplifies the new breed of “player.” A native of Sherman Oaks, he worked in development at Paramount, then broke into the big leagues by selling ideas for the hit movies “Night Shift” in 1982 and “Splash” in 1984, both directed by Howard. In 1986, when movie stocks were hot, the pair formed Imagine and took the company public with the help of Tom Pollock, who was then their attorney. They raised $16 million, hired a staff and began developing projects. “We [started the company] for time efficiency,” says Grazer, an exuberant 38-year-old who conducts business from a sun-drenched Beverly Hills office filled with Southwestern-funky furniture. “It had taken seven years to make “Splash.’ We’d had to consult with Disney on every move from story to casting-driving to the studio, waiting, schmoozing. I figured if we had our own money, we wouldn’t have to do as much driving.”
Grazer now runs Imagine like a ministudio, risking the company’s money developing ideas and scripts, then trying to turn them into movies. What’s the secret of Imagine’s success? Part of it comes from an unexpected stroke of fortune: Pollock was tapped by Universal in 1986, and one year later signed a deal to pay production and distribution costs for 20 Imagine pictures, an arrangement worth more than $300 million. (Another $125 million comes from Showtime.) Although Pollock and Imagine sometimes clash, Grazer and Howard are usually free to hire talent and run the production without interference as soon as Universal approves the concept.
Grazer and Howard have also built up a stable of loyal stars, including Steve Martin, Tom Hanks and Michael Keaton. They also have close ties to writers like Babaloo Mandel and Lowell Ganz, who worked with Ron Howard on “Happy Days” and have written the screenplays for “Night Shift,” “Splash” (with Bruce Jay Friedman) and Howard’s 1989 hit “Parenthood.” “Parenthood” took just 18 months to write and shoot, grossed $98.8 million and propelled Imagine into the black. (Imagine now earns a hefty fee for each movie it produces for Universal, plus back-end profits, TV syndication sales and Ron Howard’s directing income and profit cut.)
Tough cop Every Monday, Grazer holds a meeting with a dozen colleagues, most of them in their 20s and 30s, to discuss the 60 projects he’s developing. Pollock called recently to say that he’s agreed to throw Universal’s money behind one of two scripts, “Cowboy Way” or “Capital Offense.” “It’s my choice,” says Grazer, who’s meeting with the actor Dennis Quaid to discuss the cowboy film. Shooting began in downtown L.A. three weeks ago on “Kindergarten Cop,” a $20-million-plus comedy starring Arnold Schwarzenegger and directed by Ivan Reitman. Pollock approved the movie based on a description from Grazer: “Tough, troubled cop infiltrates a kindergarten to determine which child’s in danger. " “We put it together faster than “Parenthood’,” says Grazer. “To turn something that abstract into a movie with Arnold and Ivan-that’s the biggest rush there is.”
Not every hot screenplay is developed on the inside; producers and studios are increasingly shopping in the “speculative script” market, a feverish auction process in which well-financed players bid for finished screenplays. “There’s been a buying frenzy,” says Rick Bieber, partners with Michael Douglas in Stonebridge Entertainment, which makes movies for Columbia. One major reason for the fever: new, well-funded participants like Guber and Peters at Columbia, Hollywood Pictures I and Largo need to push movies into production, and buying ready-made scripts is the quickest way. Columbia, through Stonebridge, recently paid $600,000 for “Radio Flyer,” by an obscure 27-year-old named David Mickey Evans (who also got $500,000 to direct), and $750,000 for an action fantasy called “City of Darkness.”
The hottest spec-script peddler in town is Triad Artists Agency in Century City, which sold “City of Darkness.” Since its creation in 1984 the firm has grown from 90 employees to 250. This year Triad has sold 17 scripts on spec and 11 books for a total of $20.7 million. Triad’s strategy is simple: they spot the trend early and send their writers out to produce speculative scripts. As the scripts come in, the agents rev up “the buzz machine,” putting the word out through the Hollywood grapevine that a hot commodity will soon be on the block. If the buzz is loud enough, development execs and producers scramble over one another to get the first look. They may attempt to bribe assistants with lunches or besiege agents with messages reminding them of past favors. Eventually, the buzz trickles to the top of the studios. “The hype just feeds on itself,” says Robert Hohman, cohead of the agency’s motionpicture/literary division.
Irate call The game used to take days-now it can be over in a matter of hours. For its biggest script sale, “The Ticking Man,” a sci-fi thriller about an android with a nuclear-bomb implant, Triad whetted appetites by sending studios and producers ticking alarm clocks emblazoned with the message THE TlCKING MAN IS COMING. Triad gave the players just one afternoon to read- and bid for-the property. The demand prompted an irate call from one studio chief. “You want me to stop business at my studio so three VPs can close their doors and read this script?” he asked. “Well, you don’t have to,” the Triad man drawled. The studio chief did. The script was sold that day for $1.2 million-not to that studio but to Larry Gordon’s Largo Entertainment.
Some studio execs have thumbed their noses at the spec-script game. “A lot of these movies will never be made-it’s an outrageous expense,” says one. Until Disney’s newly formed ministudio, Hollywood Pictures, started buying scripts, studio chairman Jeffrey Katzenberg almost always stuck to internal development; he even takes his executives on 24-hour retreats and asks them each to come up with three movie ideas. Paramount prefers to I develop scripts in-house or rely on the resources of big-name producers like Simpson-Bruckheimer, Eddie Murphy or Stanley Jaffe and Sherry Lansing (“Fatal Attraction”). Other studio chiefs have countered the spec-script trend by signing writing talent to long-term deals.
Even some powerful agencies have shied away from the bidding wars for hot properties. “Hollywood has never liked an auction,” says Robert Bookman, an agent at Creative Artists. Bookman recently set an asking price of $1.5 million for the movie rights to Michael Crichton’s new book “Jurassic Park,” about bioengineered dinosaurs who run amok in an amusement park. The rights were purchased last month by Universal and Steven Spielberg’s Amblin Entertainment. Universal now plans a $40 million to $50 million special-effects-filled blockbuster-with a potential blitz of merchandising and themepark spinoffs.
Lucrative spinoffs depend on big ticket I sales, which require massive mobilization in this era of dueling blockbusters. U.S. marketing costs have soared from an average of $6 million in 1984 to $8 million to $12 million today. Score a hit-like Paramount’s “The Hunt for Red October”-and the profit potential at home and abroad is huge. “Domestic box office is the locomotive pulling the train,” says Barry London, who runs Paramount’s marketing and distribution, which Rick Bieber of Stonebridge calls “a monster machine.”
Media blitz The machine has never worked better than for “Hunt.” Paramount created a roughly $7 million “teaser” campaign. First came red posters, blitzed across billboards, bus shelters and buses: “The Hunt is On. 3/2/90.” Then a Sports Illustrated swimsuit-issue ad (“Invisible. Silent. Stolen.”), a TV preview 10 minutes before Super Bowl kickoff and major ads in the sports sections around the country. Despite mixed reviews, the film did a healthy $17.1 million its first weekend-and has grossed $115 million so far.
Domestic marketing is only part of the strategy. As Europe and Japan open more theaters and launch satellite and cableTV networks, selling abroad is taking on ever more importance. Universal took in $215 million at foreign box offices last year, plus $470 million in video and TV sales. That was nearly 40 percent of total revenues. Blockbusters like “Indiana Jones and The Last Crusade,” “Black Rain” and “Back to the Future Part II” all made more money overseas than at home in 1989. Studios send big stars on grueling overseas promotional tours and launch megabudget films overseas close to U.S. release dates. Universal first released “Back to the Future Part III” in Southeast Asia. not America, and Paramount plans to open “Days of Thunder” in Japan on June 29 two days after the U.S. premiere.
Is the blockbuster game in danger of fizzling out? It’s happened before. But while Fox Inc. chairman Barry Diller has warned of “an enormous loss of control over spending,” successful hits play to ever larger audiences at home and abroad. “It’s a big bang, a resonating effect,” says film analyst Art Murphy. That means more big stars, more sequels, more shoot-’em-up thrillers. The next assault is on Eastern Europe: in March Warner Bros. struck up a joint venture to build and operate multiplex cinemas in the Soviet Union. That’s a potential new audience of 290 million- just waiting to get a taste of the patented Hollywood recipe for movie magic.
Cost Paramount says $45 million; other reports go as high as $60 million.
Star salaries Tom Cruise is believed to have been paid at least $9 million.
Marketing gimmicks Tie-ins with Hardee’s, Mello Yello and Chevrolet toy cars; even a Nintendo game.
Cost Estimated to be roughly $60 million.
Star salaries Bruce Willis has been widely reported to have earned $7.5 million.
Marketing gimmicks T shirts will be peddled in theaters, and more clothing will be sold at Penney’s and Sears. A Black & Decker “product placement” contest.
Cost As much as $60 million.
Star salaries Arnold Schwarzenegger was reportedly paid $10 million, plus a percentage of the profits.
Marketing gimmicks T shirts and a novelization-plus buildup through 75 “advance” screenings and promo during NBA playoffs.
