The Biggest Little Story In A While…
April 10 – Clearly the fringe operators are falling by the wayside, but the stalwarts like Village Roadshow, Spyglass, Legendary and Relativity are still very much in the game. Asked about one report that all was lost, the head of a production-financing entity said simply, “It’s true, but it’s not true. We’re raising money from a new banking source. We’re still players.”
Village Roadshow this year helped finance Clint Eastwood’s $40 million movie “Gran Torino,” which will do $260 million worldwide.
That’s the sort of result that keeps the money flowing. Or that finds new money.
April 16 – Village Roadshow Pictures, Warner Bros.’ longtime feature co-financing partner, was unable to deliver its share of funding on four titles last year, leaving the studio to cover the entire cost, Time Warner disclosed Wednesday.
Village Roadshow also may not be able to finance the 2009 films to which it has committed. The four pics from last year were “Get Smart,” “Gran Torino,” “Nights in Rodanthe” and “Yes Man.”
Hey… you… look at the agents putting all their suits in one closet… don’t pay any attention to THE MONEY THAT KEEPS THE BUSINESS GOING FALLING AWAY…
Hollywood’s studios have built a funding bubble around DVD bubble… not unlike Wall Street following the internet bubble with the real estate bubble. And the situation is just as bad… except that the infrastructure of a film studio is actually so much smaller than, say, the auto industry, that it can cruise along without acknowledging the RED ALERT for a couple of years.
If you want to know why the summer looks so much different than the last few summers, it is that responsible studio top execs put on the brakes over a year ago.
And what remains the biggest bullshit story in this industry right now? That the box office doing okay answers the questions that this industry has to face and face sharply.
What’s the second dumbest story? That the AMPTP behavior towards the unions/guilds was acceptable in the face of an economic downturn… when, in fact, the costs of non-star union talent is one of the smallest, already cut back budget lines on any movie or TV show…. and the stars are not an issue with these contracts since they essentially create their own rules via negotiation.
Anyway… Village Roadshow quietly not paying their bills is not a small story. (Financial Times did more than quote the earnings release and spoke to an unnamed source at Village Roadshow, who says that the company will eventually pony up what they owe.) And one of the least reported stories in town right now is the cash crunch being experienced at a few of the studios in particular. WB is fortunate that Harry Potter is here again. But those Friday night numbers are going to be sweatier this summer than any time in memory.
Dave – Look at what you said about the new name of the Endevaor/WMA agency and the word entertainment. Then look at how many agents are in the middle of securing financing. The WB/Abu Dhabi Media deal was CAA, as IIRC, the Reliant/Dreamworks one. Putting aside what these deals have actually produced, it’s clear which direction this is heading. If an agency can secure partial financing and talent, why would a studio work with producers who bring neither? If an agency has access to funding, why not secure it for your own productions? It’s a variation on the Legendary model and it’s going to squeeze out a lot of middle-men. Studios will solely become distribution machines, agencies will turn into production combines. The product will suffer because a project will be limited to packaging in-house talent. Smaller agencies are going to be devoured since they don’t have access to capital and the modern producer is going to have to form partnerships amongst each other and go the independent route.
There’s an upside if producers are willing to go the Killer Films/Linda Vachon path because they’ll have ownership, direct sales and the chance for theatrical distribution. Smaller budgets, but more cost effective due to digital.A lot of the old schoolers will retire since the glamor will fade, but that creates an opening. It somewhat parallels what you’ve been talking about regarding the journo end.
Martin, hasn’t the industry been trending in this direction for awhile? Instead of a Department store model where you could find everything under one roof, the studios have turned into shopping malls where individual companys can hang out their shingle. And while the agents will indeed be able to package deals (isn’t this what Mark Gordon already does with his production company?) I think the power talent will still be able to insist on working with writer A or Director B on projects even if they have to cross company lines.
As far as Warner’s goes, while I disliked having to wait another six months to see the new Potter film the decision to move it to summer is now looking smarter and smarter. Not just for them but also for the exhibitors and the industry at large.
No wonder TWX came in so far above expectations in the film segment 🙂 Maybe they changed the ultimates on Gran Torino to reflect a greater ownership to themselves! That must be a very profitable film unless Clint gets enormous points.
What then becomes the distinction between agency and mgmt co? What are the legal distinctions that need to be made?
How soon before smaller players are bought up or forced out? Even if they retain equity, it seems like if titles are all packaged there’d be the potential for them to not have an ultimate buyer. At what point would the presumable industry wide exclusivity deals constitute collusion? Not that the DOJ would ever step in and cite anti-trust, but I don’t think it’s completely far fetched to have a doom & gloom fear over the direction the industry could take.