Sharing costs, talents, and profits proves that sometimes two studios really are better than one
Do you play well with others? Are you good at sharing? Then you could be a Hollywood leader in the emerging business of coproductions, where lately it’s in for a nickel, in for half a dime.
Until recently, coproductions were a way of making a gun to your head look like a smart decision: When a studio couldn’t afford a film’s budget — or another studio had a competing project — it would swallow its ego and partner up (a precedent set back in 1974, when Fox and Warner Bros. merged their burning-skyscraper projects into The Towering Inferno). Then along came back-to-back Best Picture winners Titanic (coproduced by Paramount and Fox) and Shakespeare in Love (coproduced by Universal and Miramax), and everyone forgot that Titanic was hugely over budget and that Universal had foolishly handed Shakespeare in Love to Miramax before seeing the error of its ways and hopping back on board. Suddenly, all four companies looked brilliant, and refusing to share seemed plain greedy. Or worse — just plain stupid.
”I need to have a range of stars and genres in my portfolio,” says Rob Moore, CFO and executive vice president of Disney, a studio that, like Warner Bros., Fox, and Viacom, relies on movies to feed products to other divisions (theme parks, music labels, television networks). ”By nature, $100 million movies have less upside because they’re priced so high. When a movie costs $100 million, it has to gross $200 million worldwide to make a return; and if one doesn’t work, my year is wiped out.” Moore — who has overseen Disney’s partnering with Paramount for the Julia Roberts/Richard Gere blockbuster Runaway Bride and Martin Scorsese’s upcoming Bringing Out the Dead, starring Nicolas Cage — adds: ”It’s so much easier to sleep at night if instead of having one movie working, I own two halves of two movies. No one can convince me that Warner Bros. wouldn’t have been happier if they’d had a partner with Wild Wild West.”
Coproductions, however, aren’t just about avoiding costly mistakes but also about combining two studios’ strengths. For instance, Miramax is famous for its relationships with talent, while larger studios have more cash at their disposal to option expensive projects or bigger libraries to mine for remakes. When Columbia snapped up the rights to Cormac McCarthy’s All the Pretty Horses, it offered Billy Bob Thornton directing duties. But Thornton, who had made Sling Blade for Miramax, owed the Weinsteins his next picture; so Miramax agreed to loan him out in exchange for the chance to coproduce. It didn’t hurt that Columbia wanted as its star Matt Damon, who’s been bonded to Miramax since his experiences with Good Will Hunting and Rounders.
Miramax performed a similar swap with another Damon vehicle, The Talented Mr. Ripley. Paramount had optioned the Patricia Highsmith thriller and wanted Anthony Minghella (Miramax’s The English Patient) to direct. Again, Miramax owned Minghella’s next picture; so again, it agreed to hand him over in exchange for coproducing the movie — and no doubt the studio aided in casting Gwyneth Paltrow, whom cochairman Harvey Weinstein has called ”the first lady of Miramax.” As Paramount Pictures vice chair Robert G. Friedman says, ”Harvey loved Ripley, and we loved Anthony.”
When MGM/United Artists paid $1.25 million for Charles Frazier’s novel Cold Mountain and Miramax wanted in, MGM agreed to share — if Miramax would share a project it had originated, a remake of the Jimmy Stewart classic Harvey. The studios expanded the deal further, with MGM giving Miramax access to its library and the aid of its international distribution arm in return for Miramax’s production know-how on several future features. “With Cold Mountain, I think we’ll get a movie that works better artistically at a better cost and has the right distribution behind it,” says MGM’s vice chair Chris McGurk. “Miramax is the best in the business at finding low-cost ways to open movies, but they don’t have international distribution.”
Even studios that are anti-sharing in principle are making exceptions when the deal is sweet enough. “If you don’t really believe that a picture’s worth making, you shouldn’t make it,” says Fox Films president Tom Rothman. That said, “there are certain things that make it worthwhile, and that’s Steven Spielberg and Robert Zemeckis.” To that end, Fox is coproducing Spielberg’s upcoming DreamWorks film Minority Report, which will star Tom Cruise; Zemeckis’ Cast Away, with Tom Hanks and Helen Hunt; and possibly What Lies Beneath, featuring Harrison Ford and Michelle Pfeiffer. Like Fox, Sony prefers not to share projects that it develops, but, explains Columbia TriStar’s motion pictures president Ken Lemberger, “we can handle more pictures in distribution than we can make, so we’ve engaged in an active acquisition program.” Sony has snapped up international distribution rights to Universal’s The Bone Collector, starring Denzel Washington and Angelina Jolie, and the Julia Roberts starrer Erin Brockovich, as well as Disney’s Chris Columbus/Robin Williams comedy, Bicentennial Man. The studios will share production costs and profits evenly in a practice known as splitting the pot.
“If you have a huge runaway hit, your profit is mitigated,” acknowledges Stacey Snider, cochair of Universal. “But these deals tend to protect your downside. As an element to a business plan, it’s strategic.” Universal is sharing costs and profits on Meet the Parents and Gladiator with DreamWorks, a studio that will have seven coproductions in release or development by the year 2000.
So how does the what’s-mine-is-yours attitude actually feel when you’re calling another studio in for help? Says McGurk: “It’s a different business than it was a few years ago. To make movies work, everyone has to get smarter. And that means leaving your ego at the door.”