Box offices blues for Sony Pictures and Savoy Pictures
Box offices blues for Sony Pictures and Savoy Pictures -- Why film studios are drowning in debt due to some bad business decisions
You think you’ve got problems paying the bills. Just be glad you’re not a movie mogul. Box office returns may be bubbling along — 1994’s ticket sales are nearly 5 percent ahead of last year’s — but there still hasn’t been enough box office pie to go around.
SONY PICTURES Check, Please: Five years after buying Columbia Pictures for $3.4 billion, Japan’s Sony Corp. is realizing that the company, rechristened Sony Pictures, has turned into a graveyard for expensive disasters like I’ll Do Anything, Geronimo, and the dead-on-arrival Frankenstein. Inevitably, Sony admitted to a $510 million third-quarter operating loss and wrote off $2.7 billion to mop up its red ink. Who Ran Up the Tab? Sony Corp. of America president Michael P. Schulhof okayed the spending; Sony Pictures former chairman Peter Guber did the shopping. Guber’s reward? His resignation was cushioned by a lucrative producing deal — and his five-year take comes to an estimated $200 million. Brown-Bagging It: With a price tag rumored to be $125 million, Godzilla, Sony’s soon-to-shoot attempt at a neo-Jurassic hit, could be an endangered species. ”Sony’s in a crunch,” says one producer, ”and each day Godzilla dies a little bit more.”
SAVOY PICTURES Check, Please: Founded almost three years ago, small distributor Savoy never found its niche-films like A Bronx Tale and Serial Mom garnered good reviews, but bad attendance. For the first nine months of ’94, Savoy suffered $28.9 million in losses. Who Ran Up the Tab? President of motion pictures Alan Greisman, who left last fall with an independent-producer deal. Brown-Bagging It: Rather than cutting back, Savoy cofounders Victor Kaufman and Lewis Korman are trying to ease their debt load by offering bondholders a total of $105 million worth of stock. Meanwhile, Ben Stiller is trying to negotiate his way out of directing Savoy’s budget-troubled adaptation of Scott Smith’s A Simple Plan.
CAROLCO PICTURES Check, Please: Cliffhanger, high-flying Carolco’s last hit, is exactly what the financially strapped company looks like. The studio just missed the due date for a $3 million payment to the Hollywood talent guilds and is laboring to complete a financing deal for the reported $75 million Geena Davis pirate epic, Cutthroat Island. And though StarGate is a hit, Carolco gets only a fraction of its revenues. Who Ran Up the Tab? Legendary spendthrift CEO Mario Kassar. Brown-Bagging It: Kassar sold rights to the estimated $35 million Showgirls to a French company; to get out of a pay-or-play deal that could have cost up to $15 million, he gave Arnold Schwarzenegger the rights to the reported $100 million Crusades.
MCA INC. Check, Please: While Waterworld‘s budget edges toward a rumored $130 million, MCA’s chieftains Lew Wasserman and Sidney Sheinberg are locked in a battle for control of MCA/Universal’s future with their overseers at Matsushita. The net result of the two problems ”is a budgetary crunch,” says one producer. ”You can feel the tension on the lot.” Who Ran Up the Tab? ( Kevin Costner and his Waterworld director, pal Kevin Reynolds, are presumably responsible for the movie’s drift. Brown-Bagging It: Waterworld wouldn’t seem so troubled if the corporate fight could be resolved. To that end, Matsushita has reportedly hired investment bankers Herbert Allen & Co. and CAA’s Michael Ovitz to evaluate the company’s options. The Japanese insist they don’t want to sell the studio to anyone-including Sheinberg ally Steven Spielberg-but then why hire Allen, who’s known as a supersalesman? (With reporting by Anne Thompson and Jeffrey Wells)