• Outside the system: The Heavyweights

    December 5, 2005

    Variety weighs in on a dozen independently financed contender heavyweights that could find themselves in the kudo mix.

    BROKEBACK MOUNTAIN
    Focus Features
    IN SHORT: Ang Lee's adaptation of Annie Proulx's short story about the relationship between two cowboys over 20 years is a pic about forbidden love and longing that's as compelling as it is unusual. The idea of two actors on the rise, such as Heath Ledger and Jake Gyllenhaal, starring in a gay love story -- even a macho one -- has caused controversy from the get-go, even as the film gathers kudos and warm critical response.
    COIN: Budget was $13 million. Project was first at Sony, then at Good Machine, and ended up with Ted Hope's This Is That shingle. Bill Pohlad's River Road took on the financing as part of an equity deal with Focus right before filming started.
    KUDOS: Debuted at the Venice Film Festival, where it won the top prize, the Golden Lion; played at Telluride and Toronto. Nommed for four Independent Spirit Awards
    PROS/CONS: Ledger is a strong candidate for actor, while Gyllenhaal, who could get notice for "Jarhead," has longer odds for supporting actor. Lee, who has been nominated in the director category before, has a good chance for another mention. Picture and screenplay noms are also possible. The subject matter could go either way in helping or hurting the pic's kudo chances.

    CAPOTE
    Sony Pictures Classics
    IN SHORT: Bennett Miller's narrative debut shrewdly captures the events surrounding the creation of "In Cold Blood," Truman Capote's influential nonfiction book about a Kansas murder and the subsequent execution of the killers. Actor-turned-writer Daniel Futterman's script is a marvel of restraint, brought to life by Philip Seymour Hoffman's dazzlingly complex lead performance and Miller's acute direction.
    COIN: Budget was $7 million. Produced by Infinity Media, film was a negative pickup by United Artists, and ended up at Sony Pictures Classics after MGM's sale.
    KUDOS: Unspooled at Telluride, Toronto and New York fests; won best pic and breakthrough director prizes at the Gotham Awards. Nommed for four Independent Spirit Awards.
    PROS/CONS: Hoffman's performance propels the film from mere indie small fry to viable contender, and he has a strong shot at an actor mention. Futterman's script could garner recognition. But the film's pleasures are dark, meticulous and require patience, not exactly an Oscar hat trick. If Hollywood's leviathans fall, "Capote" could pull a dark horse picture nom.

    THE CONSTANT GARDENER
    Focus Features
    IN SHORT: Brazilian helmer Fernando Meirelles' English-language debut is a gritty take on the John le Carre novel about a British diplomat who uncovers an international conspiracy as he searches for his wife's killers in Kenya. Pic grossed more than $33 million Stateside for Focus.
    COIN: Budget was $25 million, with financing from Focus, Scion and the Premiere Fund.
    KUDOS: Won best film, actor (Ralph Fiennes) and actress (Rachel Weisz) at the British Independent Film Awards.
    PROS/CONS: Compared with smaller distribs, Focus has deep pockets for Oscar marketing. Critical support has been strong and the politically relevant subject matter could appeal to Academy voters. Meirelles and star Fiennes have Oscar pedigrees, and Weisz has a strong shot at a supporting actress nod, especially after the BIFA wins. But will the Academy take to Meirelles' arty handling of le Carre?

    CRASH
    Lions Gate Films
    IN SHORT: "Million Dollar Baby" scribe Paul Haggis' second feature as director takes

     

    on race, crime and the nature of chance in contemporary L.A. The film has grossed more than $55 million for Lions Gate.
    COIN: Budget was $6.5 million, financed by Yari Film Group and German fund Apollo Media.
    KUDOS: Won Grand Special Prize at the Deauville Film Festival. Nommed for two Indie Spirit Awards.
    PROS/CONS: L.A.-centric, socially conscious material caters to the Academy demographic, and pic had high media visibility throughout the spring and summer. But early-year releases always fight an uphill battle.

    GOOD NIGHT, AND GOOD LUCK
    Warner Independent Pictures
    IN SHORT: A spare and focused docudrama, "Good Night" examines journalist Edward R. Murrow's fight to bring down Sen. Joseph McCarthy and his communist witch-hunts, while revealing the behind-the-scenes workings of the 1950s newsroom during one of the hottest periods of the Cold War. Topical relevance has not gone unnoticed, pushing the film to over $20 million at the U.S. B.O.
    COIN: Estimated budget was $7.5 million, financed by 2929 Entertainment, Participant Prods. and Warner Independent Pictures.
    KUDOS: Opened the New York Film Festival; won five prizes at Venice, including actor (David Strathairn) and script (George Clooney and Grant Heslov). Nommed for four Independent Spirit Awards.
    PROS/CONS: Not since 1976's "Network" won four Academy Awards has a drama so eloquently captured the inner workings and corporate pressures of the broadcast news. But "Good Night" is a modest production shot in black-and-white. Still, Strathairn's performance as Murrow can't be counted out, nor can Clooney's sharp direction.

    THE LIBERTINE
    The Weinstein Co.
    IN SHORT: Debut feature from commercials/musicvid helmer Laurence Dunmore charts the rise and fall of the decadent 17th-century English poet John Wilmot, the Earl of Rochester. After screening as a work-in-progress at Toronto 2004, pic languished on the Miramax shelf for over a year while the company sorted out its titles for the newly formed Weinstein Co.
    COIN: Budget was $16 million, from Odyssey Entertainment, the U.K. Film Council, First Choice and the Isle of Man Film Commission.
    KUDOS: Was nommed for eight British Independent Film Awards but only scored one: Rosamund Pike for supporting actress.
    PROS/CONS: Stars Johnny Depp, Samantha Morton and John Malkovich each have multiple prior Oscar noms to their credit. Award voters love costume dramas, which usually garner crafts category mentions, but mixed reviews and the bawdy subject matter might be off-putting.

    MATCH POINT
    DreamWorks
    IN SHORT: Woody Allen making a drama/thriller in London
    doesn't sound like a throwback, but this story of a tennis pro in a love quadrangle, with Scarlett Johansson, Jonathan Rhys-Meyers, Emily Mortimer and Matthew Goode, is a return to vintage Woodman. Originally set in New York, Allen filmed for the first time in London to get financing.
    COIN: BBC Films produced in conjunction with Thema Prods., a Russian-funded company based in Luxembourg, as well as Invicta Capital. Allen also had his longtime producing team of Letty Aronson, Charles H. Joffe and Jack Rollins. DreamWorks acquired at Cannes.
    KUDOS: Screened at Cannes and traveled to San Sebastian and Vienna fests
    PROS/CONS: Critics hailed it as Allen's best film in years, but he still has a lot of political ground to make up with Academy voters. His best way back into the fray could be in the original screenplay category.

    MRS. HENDERSON PRESENTS
    The Weinstein Co.
    IN SHORT: Based on the true story of feisty widow Laura Henderson, who brought the West End's Windmill Theater back to life after the Depression and kept it open during the Blitz of London to inspire troops with nude musical revues. Directed by Stephen Frears, pic is full of acerbic wit thanks to the repartee between haughty socialite (Judi Dench) and her theater manager, Vivian Van Damm (Bob Hoskins).
    COIN: Financed by Pathe Pictures and BBC Films, produced by Hoskins' shingle Heyman-Hoskins Prods. The film was picked up in February by Miramax, which released the last few Frears pictures, but was transferred to the Weinstein Co. slate when the companies split.
    KUDOS: Nominated for eight British Independent Film Awards.
    PROS/CONS: All hopes are pinned on an actress mention for Dench, who should fare well with her solid heroine role befitting a grand dame. Acad could recognize pic's period details with craft noms.

    PRIDE & PREJUDICE
    Focus Features
    IN SHORT: Debut feature helmer Joe Wright's take on the saga of Jane Austen's 18th-century Bennett clan has stood out among the fall specialty releases (and from numerous previous adaptations), grossing nearly $20 million so far in platform release.
    COIN: Financed by Universal and Focus; produced by Working Title Films
    KUDOS: Unspooled at Toronto and Dinard
    PROS/CONS: Star Keira Knightley stands a solid chance of being nominated, with possible notice for supporting thesps Judi Dench, Brenda Blethyn and Donald Sutherland. Period setting bodes well for craft mentions. But with this year's deep list of major category contenders, "Pride" is a long shot for picture or director noms.

    PROOF
    Miramax
    IN SHORT: David Auburn's Pulitzer- and Tony-winning play about a mentally ill math genius was a hit in 2000, but the pic, with Paltrow in the lead, Anthony Hopkins as her dead father and Jake Gyllenhaal as the love interest, had a harder time getting off the ground. Its theatrical release this year was part of Miramax's dump, before the Weinstein Co. broke away, and wasn't a mainstream draw, grossing $7.5 million.
    COIN: Miramax developed with Hart-Sharp, and brought in Jim Stern's Endgame Entertainment for additional financing about halfway through the $20 million-plus production.
    KUDOS: Debuted at Venice, then played in Toronto. Hopkins will get the Cecil B. DeMille award at the Golden Globes in January.
    PROS/CONS: Oscar winner Paltrow gives the kind of nuanced mad-genius performance that benefited Russell Crowe in 2001's "A Beautiful Mind." But Miramax and the Weinstein Co. might not push too hard, given their recent divorce. Adapted screenplay, by Auburn and Rebecca Miller, could find its way into the kudo mix.

    THE SQUID AND THE WHALE
    Samuel Goldwyn Releasing
    IN SHORT: Writer-director Noah Baumbach put his childhood divorce trauma on display, as Brooklyn intellectual parents (Jeff Daniels and Laura Linney) and their two boys (Jesse Eisenberg and Owen Kline) live under an unusual custody agreement. Smart and funny, the film did well in New York, but didn't have much traction outside the city, cuming $2.8 million.
    COIN: Baumbach brought on "Life Aquatic" screenwriting partner Wes Anderson as producer along with Peter Newman, and they cobbled together financing from a number of companies, including Charlie Corwin and Clara Markowicz's Original Media, Andrew Lauren Prods. and Reverge Anselmo's Seven Hills Pictures. Samuel Goldwyn acquired the film after Sundance.
    KUDOS: Debuted at Sundance, where it won director and screenplay prizes. Also played at Toronto, New York and Chicago. Won best ensemble cast at the Gothams and is nommed for six Spirit awards.
    PROS/CONS: Great reviews may translate into critical laurels. Oscar hopes rest on Jeff Daniels breaking through this year's crowded actor field and Baumbach's original screenplay catching the kind of attention that usually goes to Anderson.

    THE THREE BURIALS OF MELQUIADES ESTRADA
    Sony Pictures Classics
    IN SHORT: Master thesp Tommy Lee Jones makes a foray into directing with this contemporary Western about a ranch foreman (Jones) who undertakes a precarious trip into Mexico to bury his murdered friend. After a triumphant debut at Cannes, pic was acquired by Sony Pictures Classics at Toronto. February release Stateside will follow a qualifying run in mid-December.
    COIN: Financed by Luc Besson's EuropaCorp.
    KUDOS: Won actor (Jones) and screenplay (Guillermo Arriaga) prizes at Cannes. Nommed for four Independent Spirit Awards.
    PROS/CONS: Jones' Oscar track record, critical enthusiasm and Cannes prestige will give this little indie the support it will most definitely need if it's going to compete against the well-financed specialty and studio releases. But small-scale dramas always face a battle for Oscar recognition, even if they are handled by the kudo maestros at SPC.

  • Money men mint magic

    December 5, 2005

    Oscar loves independents. Not a single wholly studio-backed project captured a top prize at last year's Academy Awards. Big winners "Million Dollar Baby," "The Aviator" and "Ray" all were co-financed from sources outside of the studio system. Sure, filmmakers can thank Universal or Warner Bros. for providing the infrastructure to complete and distribute their films, but it's guys like Tom Rosenberg, Graham King and Philip Anschutz who made their movies a reality.

    If the 78th Academy Awards don't shut out the studios once again, independently financed pics will at least give the big boys a run for their money. Major contenders like "Brokeback Mountain," "Good Night, and Good Luck," "Capote" and "Crash" all were made with the significant help of non-studio coin.

    While Hollywood blockbusters may dominate the box office year-round, at Oscar time, according to Jean Prewitt, exec director of the Independent Film & Television Alliance, "They have lower than a 50% share of the actual awards." As franchise pictures and comedies fill out the studio's full-funded slates, argues Prewitt, the majors have few resources left to offer to prestige pictures.

    "If you are sitting at the top of a studio," agrees Mark Gill, prexy of Warner Independent Pictures, "you've got your tentpoles that you want to wholly finance, you've got romantic comedy and horror films, and then all of the character-based dramas are riskier. If you're thinking about where to put your money, you think, 'I'd like to share the risk on those.' "

    Even at WIP, Gill notes the proliferation of co-financing arrangements. "Whether it's foreign sales, tax deals, equity or all three put together, that's just where the business is going for films that are risky," he says, "and that's what independent films are by definition."

    Michael Ohoven, CEO of Infinity Media, who produced "Capote" with Infinity partner William Vince and Caroline Baron, says he's seeing more negative pickups from the studios, of which "Capote" is one example. "The studios don't want the production risk on those types of movies," he says.

    "The reality is that most expensive independent movies often get financed through multiple sources," explains David Linde, co-prexy of Focus Features, which is touting "Brokeback Mountain," "The Constant Gardener" and "Pride & Prejudice" for awards attention.

    "There are different reasons for this," he says. "In our case, it's often to leverage risk somewhat while maintaining worldwide distribution rights and upside; or in the case of 'Brokeback Mountain,' it's about building a relationship with someone who you're going to work with on multiple movies."

    For "Brokeback Mountain," Focus partnered with River Road Prods.' Bill Pohlad. "Bill's investment was largely made against international rights and we have an equitable split between the domestic and foreign allocations," explains Linde.

    Pohlad is one of a handful of new financier-producers getting involved with the studios and their subsidiaries in a more integral way, making pics that are as much about quality as getting a return on their investment.

    "It's not about doing a film just because it's a good deal," says Pohlad. "I want to do something different and groundbreaking."

    Along with Pohlad, other Oscar contender enablers include Participant Prods.' Jeff Skoll ("Syriana," "North Country"), 2929 Entertainment's Mark Cuban and Todd Wagner ("Good Night, and Good Luck"), Endgame's Jim Stern ("Proof") and Stratus Film Co.'s Bob Yari ("Crash").

    "Any time you're doing a film that's outside of the box, it's a more complicated investment decision," says Stern. "And as the studios have a more tentpole philosophy today, that allows for people like myself or Jeff Skoll or Bob Yari to participate in films, and I think that can be a very good business, and good for cultural dialogue."

    And like Stern, Participant prexy Ricky Strauss notes, "Talented filmmakers are drawn to these kinds of movies, and it's always a good idea to be in business with really talented filmmakers."

    The studios are starting to take the hint. Warner Bros., for example, is a majority investor in "Syriana" and "North Country," though it received sizable help from Participant. "We like to consider ourselves facilitators for these socially relevant movies," says Strauss. "We make it easier for those decisions to be made on films that are considered risky."

    Other studio pics in the Oscar race -- "Walk the Line," "Munich" and "Memoirs of a Geisha" (a Sony co-prod with Spyglass and DreamWorks) -- indicate Hollywood coffers aren't completely empty for quality dramatic fare. As Strauss says, "Diversity is key. Hollywood has always had many different types of films in a given year. And in a world where the appetite for audiences is getting more defined, it's important to find stories that are original, compelling, fresh and well-told."

  • Ten indie Brit pix to watch out for

    November 20, 2005

    Confetti
    Genre: Wedding comedy
    Helmer: Debbie Isitt
    Cast: Martin Freeman, Jessica Stevenson, Alison Steadman
    Backers: BBC Films, Wasted Talent, Screen West Midlands
    The pitch: Three couples compete to win the title of most original wedding of the year. Like Mike Leigh's films, script was jointly assembled by cast and principal crew; characters were workshopped over a period of weeks.
    Status: Post-production

    *Fade to Black*
    Genre: Film noir
    Helmer: Oliver Parker
    Cast: Danny Huston, Paz Vega, Diego Luna
    Backers: Ealing Studios, Odyssey Entertainment, Thema Prods., Isle of Man Film, Endgame Entertainment, Fragile Films, Dakota Films Prods., Movieweb, Film 87
    The pitch: Recovering from his split with Rita Hayworth, Orson Welles starts work on a film in Italy. But when an actor is killed on set, Welles is drawn into a shady mystery that echoes "The Third Man." Script penned by Parker and John Sayles.
    Status: Post-production

    The Last King of Scotland
    Genre: African-set drama
    Helmer: Kevin Macdonald
    Cast: Forest Whitaker, James McAvoy, Gillian Anderson
    Backers: Slate Films, Cowboy Films, Tatfilm, DNA, FilmFour
    The pitch: Shot in Uganda, period-set film tells tale of a Scottish doctor who ended up becoming dictator Idi Amin's closest adviser. Pic reps first fictional feature for Oscar-winning docmaker Macdonald.
    Status: Post-production

    Mischief Night
    Genre: Comedy drama
    Helmer: Penny Woolcock
    Cast: Kelli Hollis, Ramon Tikaram, Christopher Simpson
    Backers: Company Pictures, FilmFour, U.K. Film Council Premiere Fund, Screen Yorkshire
    The pitch: Chaos ensues when a night of festivities hits a multicultural England town, entwining the fates of the white Crabtrees from one side of the tracks and the Khans on the other. Helmer Woolcock ("The Principles of Lust," "The Death of Klinghoffer") shows off her skill with ensemble casts.
    Status: Post-production

    Red Road
    Genre: Realist drama
    Helmer: Andrea Arnold
    Cast: Nathalie Press
    Backers: U.K. Film Council's New Cinema Fund, Sigma Films/Red Road Films, Zentropa Films
    The pitch: A tale of "obsession and forgiveness," according to publicity; shot in Glasgow and helmed by feature debutante Andrea Arnold, whose gritty short "Wasp" won an Academy Award.
    Status: Post-production

    Snow Cake
    Genre: Comedy-drama
    Helmer: Marc Evans
    Cast: Alan Rickman, Sigourney Weaver, Carrie-Anne Moss
    Backers: Revolution Films, Rhombus Media
    The pitch: Canadian-set pic depicts an uptight Englishman who travels to a small town to seek out the family of a hitchhiker who was killed in a car accident with him. Once in the burg, he becomes increasingly involved in the locals' lives. Film reps collaboration between prolific Brit producer Andrew Eaton and adventurous Canadian shingle Rhombus Media.
    Status: Post-production

    Sunshine
    Genre: Sci-fi
    Helmer: Danny Boyle
    Cast: Rose Byrne, Cliff Curtis, Chris Evans, Cillian Murphy, Michelle Yeoh
    Backers: DNA Films, Fox Searchlight
    The pitch: Fifty years from now, a spaceship manned by eight people sets off to kickstart the dying sun and save humanity, but the mission begins to unravel after a fatal mistake. Helmer Boyle reteams for the third time with Alex Garland after "The Beach" and boffo-selling indie "28 Days Later."
    Status: Post-production

    This Is England
    Genre: Skinhead drama
    Helmer: Shane Meadows
    Cast: Thomas Turgoose, Stephen Graham, Jo Hartley
    Backers: Warp Films, FilmFour, U.K. Film Council's New Cinema Fund, EM Media, Screen Yorkshire, Ingenious Media, Optimum Releasing
    The pitch: Helmer Meadows' fifth feature unfolds a 1983-set story of an 11-year-old in northern England who becomes a skinhead after the death of his father and is caught up in the riots that sweep the nation that year. Working with some of his regular thesps, pic is tipped to be close in feeling to his last, "Dead Man's Shoes."

    The Wind That Shakes the Barley
    Genre: Historical drama
    Helmer: Ken Loach
    Cast: Cillian Murphy, Liam Cunningham
    Backers: Element Films, Sixteen Films, EMC Produktion, BIM Distribuzione, Tornasol Films, Regent Capital, U.K. Film Council, Bord Scannan na Eireann (Irish Film Board), NRW, Diaphana Distribution, Pathe Distribution, Cineart, TV3 Ireland, Film Coopi
    The pitch: Fest darling Ken Loach's first historical drama since international hit "Land and Freedom" looks at the 1919 Irish uprising through the story of two Republican brothers battling the British army.
    Status: Post-production

    Venus
    Genre: Drama
    Helmer: Roger Michell
    Cast: Peter O'Toole
    Backers: Free Range Films, FilmFour, U.K. Film Council Premiere Fund, Ingenious Film Partners
    The pitch: Two aging actors' comfortable routine is disrupted by the arrival of one of the men's grandniece. Helmer Roger Michell worked before with novelist-screenwriter Hanif Kureishi on Cannes entrant "The Mother" and TV series "The Buddha of Suburbia."
    Status: Pre-production

  • Is There a Hit Film in the Battle for Ohio?

    November 10, 2005

    LOS ANGELES, Nov. 9 - With "Jarhead" revisiting the gulf war and "Good Night, and Good Luck" taking moviegoers all the way back to McCarthyism for a history lesson, it must not have seemed like such a stretch to make a documentary about a divisive event that at least everyone remembers.

     

    To the lengthening list of political films vying for the attention of a polarized public, James D. Stern - a serious Hollywood financier and Broadway producer who dabbles at directing his own movies - hopes to add one that looks squarely at the 2004 presidential campaign between President Bush and Senator John Kerry.

     

    The question, of course, is just how many people will want to relive that fight.

     

    While it lacks the partisanship and personality of Michael Moore's "Fahrenheit 9/11," the as-yet-untitled picture relies on a dispassionate, journalistic delivery - Mr. Stern's liberal leanings notwithstanding - to provide concise, pointed and even funny answers to anyone still wondering how Mr. Bush managed to defeat Mr. Kerry.

     

    About 13 months ago, Mr. Stern and a partner, Adam Del Deo, dispatched 15 camera crews across Ohio to chronicle the final days of the house-to-house struggle between Republican and Democratic political organizers in the most critical battleground state in the country.

     

    The resulting film, which the co-directors are still polishing in hopes of getting it accepted by the Sundance Film Festival, shows Republican campaigners functioning like a well-oiled machine and Democrats looking incapable of ordering lunch, let alone organizing a major get-out-the-vote operation. These scenes, interspersed with interviews with top strategists for both the Bush and the Kerry campaigns - with the glaring exceptions of Karl Rove and Bob Shrum - by and large leave the impression that the Bush campaign was run by major-league professionals and the Kerry campaign by bush-league amateurs.

     

    One sequence is particularly memorable: After Tad Devine, a top Kerry consultant, is quoted earnestly explaining the Democrats' strategic decision to appeal to swing voters, or "persuadables," an unshaven young Democratic operative is shown knocking on doors of these supposed persuadables in Ohio. When a young man eating his breakfast says he is leaning to the Republican side, the hapless organizer meekly asks, "Can I persuade you otherwise?" but has nothing more to add as the door shuts in his face.

     

    Most of the ground the movie covers will be familiar territory to followers of politics, however: Mr. Bush had a consistent message, Mr. Kerry did not, the movie asserts; Mr. Kerry erred by restraining Democrats from attacking Mr. Bush at their convention, only to be excoriated by the Republicans at theirs; Mr. Kerry never came up with an effective retort to the "flip-flopping charge"; and on and on.

     

    While the terms "flip-flop" and "Swift Boat" might seem to some an unpleasant but mercifully distant memory, Mr. Stern is certain that this trip back to the 2004 campaign has only grown more enticing in an intervening year marked by scandal and escalating debate over the rationale for war in Iraq.

     

    "I think this movie has gained relevance every day," he said. "The more that this administration has taken the country in one direction, I think people want to understand how it is that the political process got to the point where this president was elected."

     

    Mr. Stern's stature as an arbiter of the zeitgeist isn't so evident from his mixed track record as a director. His last documentary was "The Year of the Yao," about the N.B.A. star Yao Ming, which grossed about $35,000 at the box office - a bomb, not a misprint. He also directed the much better received "Michael Jordan to the Max," a 2000 documentary about the retired basketball superstar, which grossed nearly $19 million at Imax theaters, and a supernatural thriller, "It's the Rage," which went straight to video. (He has shared directing credit on each of his theatrical films.)

     

    Yet Mr. Stern should not be easily ignored, either. In the theater, he has been a producer of "Stomp," "The Producers" and "Hairspray," among other hit shows. And in Hollywood, his résumé as a financier includes last year's critically acclaimed "Hotel Rwanda" and the successful comedy "Harold and Kumar Go to White Castle," and this fall's "Proof."

     

    Mr. Stern, 48, acquired his financial acumen, interest in politics and even his ties to basketball at the knee of his father, Richard J. Stern, a wealthy Chicago entrepreneur, part-owner of the N.B.A.'s Bulls and prominent Democratic donor. In 2003, the younger Mr. Stern, who also manages the family's investment fund, set up a fund of his own, Endgame Entertainment, with a term of three years, as a way for him to establish a track record as a film producer.

     

    In increments of less than $5 million, the fund generally makes short-term, relatively safe loans, providing the last piece in a film's financing puzzle, as Endgame did with "Harold and Kumar"; and direct equity investments, as it did with "Proof," which was brought to Mr. Stern by Harvey Weinstein, another investor in "The Producers." (For his money, Mr. Stern received an executive producer's credit on both films.) It also develops its own productions.

     

    While Mr. Stern has been a quiet presence in Hollywood, he has quickly built a reputation for both financial savvy and taste. "He responds well to 'It's a good deal,' and also to 'It's a really good project,' " said Peter Schlessel, a former executive at Sony Pictures, which distributed "It's the Rage," and who with Mr. Stern is one of the producers of "Stay Alive," a forthcoming horror film. "A lot of people in Hollywood may have the left brain or the right brain, but it's rare to operate on both sides."

     

    With the fund approaching its closing in February, Mr. Stern said his plan now was to turn Endgame into an operating company, giving him the freedom to do acquisitions and joint ventures and cut other long-term deals. His investors, who he says have made 35 percent on their money, are apparently coming along.

     

    "This is really a bet on Jim Stern," said Tom Barton, a Dallas-based hedge fund manager best known as a short seller, who said he was pushing Mr. Stern to make bigger financial bets on movies. "I expect him to be a very steady moneymaker across the board and, because he has that great taste, to be able to find one or two of those grand slams."

     

    Whether Mr. Stern's political documentary has any chance of being a grand slam, or even of getting into theaters, could well be decided in a few weeks, when Sundance announces its schedule; his film is being represented by John Sloss, a lawyer known as a festival kingmaker.

     

    If Mr. Stern has shown a knack for juggling dual agendas as a financier and filmmaker, meanwhile, he may have a third motive for pushing to get his film in front of audiences: he sounds very much like a devoted Democrat trying to shake his party into fixing its problems in time for the next election - and with a certain Illinois-bred New York senator in mind.

     

    "As we go forward at first into 2006, and then into 2008, I think this movie will be even more relevant, and I think the audience for it is expanding," he said in an interview. "You're going to go out and nominate a candidate in the Democratic Party. The question is, Can she win a place like Ohio?"

  • Reinventing The Deal

    November 3, 2005

    Imagine this: You're an independent producer who has just received a "QD letter" from a studio, agreeing to release your film, only the studio won't accept responsibility for the $800,000 the Screen Actors Guild is demanding as residuals' contingency.

     

    Or this: You've pieced together the elements for a U.K. "sale-and-leaseback" subsidy. But the British government insists on having a print by late March, when the finished film won't be ready until the fall.

     

    Maybe: Arnold Schwarzenegger has decided to abandon governing California in order to become one of the essential elements in your movie. But that means extending "force majeure" insurance by 120 days, with added payments and interest for your completion bond.

     

    Confused? If so, you are ready to join the legions of independent producers who wrestle with such matters every day, struggling to untangle a thicket of legal and financial problems that have become ever more complicated as funding sources stretch across the globe and local tax breaks and subsidies become integral to film financing.

     

    Terms like a QD letter (a "qualified distributor" letter), sale-and-leaseback (a British subsidy) and force majeure (acts of nature that might sabotage your movie) are as common to the indie world as above-the-line and below-the-line talent are to the studios, only they take a lot more vetting. Because of that, indie producers are turning more and more to battalions of lawyers to help sort them out.

     

    "The reason these matters are so complex is to make sure you are satisfying the legal requirements of what are frequently multijurisdictional transactions," says John Burke, a partner with the law firm Akin Gump Strauss Hauer & Feld. "That means you are dealing with laws and people in a variety of countries."

     

    An independent movie frequently calls on the services of anywhere from a dozen attorneys to as many as three times that number here and abroad, with individual lawyers representing producers, writers, actors and directors, as well as sales and distribution companies and the financial institutions that back them. These attorneys charge fees ranging from $250-$800 per hour or take a percentage of their clients' income — often around 5%, half an agent's standard commission.

     

    Add up these sums, and the result is that an indie film must allocate upward of $250,000 for legal costs and sometimes as much as $1 million — certainly in the case of higher-budgeted indie titles like Lions Gate's September release "Lord of War," starring Nicolas Cage. But often, the budget is not the most important criterion governing legal costs.

     

    "Whether it is a $5 million or $8 million picture, or 'Lord of War,' the budget almost doesn't make a difference," says attorney Robert Darwell, chair of the entertainment and media group at Sheppard Mullin Richter & Hampton Llp. "Even smaller-budgeted films can be just as complicated in the arrangements because the same type of documents need to be (completed). Size of budget doesn't dictate paperwork; what does is how many parties are involved and whether or not there is some tax-incentive component."

     

    All of these came into play with "Lord," which took a veritable army of attorneys to piece together, Darwell notes.

     

    "There's in-house counsel for the bond (insurance) company and for the bank, which also has outside counsel; there's producer's counsel; there's the German film fund's counsel — they had both German and Los Angeles counsel. (Financing entity) Endgame Entertainment provided a bridge loan, and they had counsel; a sales agent had counsel; we also had a separate French equity source, and they had counsel; and our lead actor, Nicolas Cage, was very involved (in the legal issues) because of his compensation arrangement on the picture," Darwell says.

     

    Typically, a star's revenue for an indie film is much more complicated to figure out than for a studio film, where one source — the studio — makes all the payments. (Cage took a pay cut in order to make "Lord.") As a result, a considerable amount of legal work has to be done in brokering deals and verifying funding, which often comes from at least 20 different worldwide distributors and usually goes into a pool where it is checked and handled by companies that specialize in collections — often one of two companies in Europe: Fintage House and Freeway Entertainment. There, clerks and assistants who have never even been to Hollywood know more about the details of star salaries than anyone at a studio.

     

    Collection is the endgame in a years-long process that involves lawyers from the very start.

     

    Doug Stone, an attorney with Stone, Meyer & Genow, became involved with Lions Gate's upcoming "Flyboys" at the film's inception, when he helped his client, producer Dean Devlin, get the process of developing a screenplay underway.

     

    "My first involvement with 'Flyboys' was in acquiring the script and hiring a writer to do additional writing," says Stone, who has repped Devlin for nearly 15 years. That, he says, is "meat and potatoes" for a lawyer, though "in the independent world, the trick is coming up with enough money to interest somebody like (scripter) David S. Ward."

     

    Once the deal was in place, Stone could essentially wait until Devlin felt ready to make the film. Then, when Devlin decided to go the independent route with his $60 million-plus period piece, Stone again became actively involved in the project.

     

    In May 2004, he flew to Cannes for meetings with Devlin and different financiers. "Dean had set up a lot of meetings through his own contacts and relationships," Stone says. "I would attend meetings if he asked me to, with everybody from tax funds to equity to sales companies."

     

    At that stage, Stone says, "I see my job as trying to guide the early parameters of the deal in a way that would ultimately work. At this point, you are not (contending with) legal jargon. (You're) trying to keep track of what you have to give, what they have to give and knowing what other elements you need — whether international sales or domestic distribution or private equity or where the copyright ultimately resides or who has ultimate control of creative and business (affairs)."

     

    Stone would have been thrilled if the Cannes meetings had led to financing for the picture, but he came home with no pacts in place.

     

    Meanwhile, Devlin continued to pursue money, finding some through British tax fund Ingenious Film Partners. Then Stone took on a new client, David Ellison, son of Oracle chief Larry Ellison, who was just coming out of film school at USC and looking to produce films.

     

    Ellison happened to be an experienced pilot and related to the theme of the film. "I asked Dean for permission to give him the script," Stone says. "He loved it, and he was willing to bring in some equity."

     

    Stone then had to part ways with Ellison on the deal because of strict conflict-of-interest rules governing lawyers that made it inadvisable for him to handle both clients on the same deal.

     

    This, of course, was just the beginning of getting "Flyboys" made. "The financing and documentation were extensive," Stone says. "They involved hundreds, if not thousands, of pages and were complicated because you have equity from different sources — you've got Ingenious' equity; sale-and-leaseback, which has a lot of specific regulations; you've got the bank and the bank's lawyers; you've got a collection account (whenever you have this kind of money, you generally want a third- party independent collection agent so everybody knows where the money is going); and you've got a sales agent" (in this case, Lions Gate International). Needless to say, Stone was involved in all of those deals.

     

    Hardest of all in negotiating deals, he says, is the issue of who gets paid when. "The biggest thing you are negotiating is the return-on-investment that each of the parties is putting up and the recoupment schedule for how all of those parties will get their money," Stone says. "You have to negotiate with each party how that comes to pass."

     

    Stone estimates that putting "Flyboys" together involved the work of "probably 10 key lawyers and 30-35 lawyers in all."

     

    And all of them were racing against the clock. "We had a very firm date by which the deal had to close: the end of March 2005 (because it was) a fiscal end-of-year issue for one of the financiers," Stone says. How close did it get? "We had one hour and 15 minutes to spare!"

     

    For anyone who doubts how much work is involved, a glance at the documents that need to be negotiated and signed is an eye-opener. Craig Emanuel, a partner with Loeb & Loeb and head of its entertainment division in California, supplied The Hollywood Reporter with a double-spaced list of document titles that ran six pages and included such abstruse fare as an "initial drawdown notice and borrowing certificate," a "collection account-management agreement" and a contract governing "mortgages and assignments of copyright." Chain-of-title documentation alone — that is, proof of ownership of the underlying material — includes not only the relevant contracts but even a copyright research report that has to be ordered by the producer.

     

    The biggest challenge for lawyers is to get everyone to agree to the basic terms of the deal and to sign the most important contract, known as an inter-party agreement (a document signed between the key players — the producer, the distributor, the bank and the bond company — governing such issues as budget and payment schedule). Getting this document signed involves doing deals encompassing different currencies and tax breaks and subsidies that change by the month.

     

    "Films that don't have domestic distribution end up looking for these elaborate multiparty, equity co-production deals," Emanuel says. "But the danger with that is, the more parties you have involved, the greater the risk that one of the elements may fall out."

     

    Of course, when a key element does fall out, the movie can die a sudden death, no matter how much preparation has gone into it.

     

    "Until all the pieces come together, you don't know if you actually have a movie to make," says Fred Bernstein, a partner with Manatt, Phelps & Phillips and co-chair of its entertainment, advertising and media practice. "In the studio world, you only need one person to say yes. In the independent world, what you are often doing is constructing a financial plan out of multiple pieces from often very disparate sources, and they all have to mesh together. And every time there is a change or a hiccup or a problem with one of the pieces, it affects everything else."

     

    Even when a movie has solid financing from a private-equity investor like real estate mogul Bob Yari, the legal issues can be extraordinarily complicated. Neil Sacker, chief operating officer of the Yari Film Group and a former business/legal affairs executive with Miramax Films, says signing talent pacts is among the most difficult of tasks.

     

    Referring to a deal he is negotiating for Naomi Watts to star in Warner Independent's drama "The Painted Veil," he says: "You are dealing with an actor coming off (Universal's planned December release) 'King Kong.' She is at an A-plus level in her career, and when an A-plus actor does an independent film, there is a tension between the studio accoutrements and how you make that work on a limited budget."

     

    One problem in any such contract, Sacker adds, is defining the back end. "With lead actors in independent films, that is always an adventure. Every issue is up for discussion in terms of how to define what gross receipts go into the pot and what fees we can take. Because we don't necessarily know who's distributing, we don't know what fees might be charged us."

     

    Sacker says that many of the issues with "Veil" are still being worked out — or they were at press time — even though production started in August. In this case, once he has agreed to some of the basic deal points, other lawyers "will go through hundreds of issues in the long form (contract). This one is taking three to four months. We need to get it done because the banks require that the key actors' contracts be executed. We are self-financing the film until our bank loan closes. We are under enormous pressure."

  • Brandissimo! Inc. and Endgame Entertainment Announce Meteor the Monster Truckā„¢; New Entertainment Franchise for Preschool-Aged Boys

    August 29, 2005

    LOS ANGELES & NEW YORK -- Endgame Entertainment, an equity production fund, and Brandissimo! Inc., a family entertainment production company, today announced the creation of Meteor the Monster Truck Company, LLC.

     

    Under the terms of the agreement, Endgame Entertainment and Brandissimo! are developing and producing Meteor the Monster Truck(TM), a computer-animated cartoon property for pre-school aged children that will be available on DVD in November 2005. Twenty-six episodes of Meteor the Monster Truck are already in production. A feature film and additional products, including toys and computer games, are in active development.

     

    James D. Stern, CEO of Endgame Entertainment, said, "I'm thrilled that Endgame has partnered with Brandissimo! to bring Meteor to as wide an audience as possible. It's a wonderful property with characters that will jump out and grab kids right and left. We couldn't be happier."

     

    Meteor the Monster Truck is specifically designed for children ages 2 1/2 to 6, particularly boys. In it, kids explore the missions and dreams of a hard-playing group of young monster trucks, including Meteor(C), Jose(C), Junkboy(C), Ponytail(C), and friends.

     

    "Because the entertainment and developmental needs of preschool-age boys are specific, we have created Meteor the Monster Truck around boy play-patterns. With an emphasis on delivering fun, these stories will teach young boys how to positively channel their physical energy and learn appropriate social boundaries," said David Snyder, one of Meteor's creators.

     

    "Meteor the Monster Truck fills a real void in the marketplace," said Douglas E. Hansen, COO of Endgame Entertainment. "As the father of two young boys, I am proud to be associated with the project."

     

    "After helping to produce a lot of careful, politically correct children's television shows in the past," said Bill Gross, one of the creators, "we are excited to be working with Endgame Entertainment to tell stories that demonstrate and validate the manner in which real boys play."

     

    Meteor the Monster Truck was developed by children's entertainment specialists, Gross and Snyder, who recognized that almost nothing on TV or in games provides young boys a positive model for playing--and learning. Gross and Snyder are former Walt Disney Company creative executives who also worked on the pre-school mega-hit Thomas the Tank Engine(C) and numerous other high-quality television properties.

     

    ABOUT ENDGAME ENTERTAINMENT

     

    Founded in March 2003, Endgame Entertainment is a full-service production and finance company based in Los Angeles and headed by James D. Stern. Endgame works across all categories of entertainment including film, theater, television and games. The Company has co-financed films including the Oscar-nominated Hotel Rwanda, Beyond the Sea, Harold & Kumar Go to White Castle (with Senator Intl. released by New Line) and the supernatural thriller White Noise (with Gold Circle released by Universal). Theater accomplishments include Little Shop of Horrors and White Christmas, among others. Currently, Endgame has more than 10 projects in production including Meteor the Monster Truck, and has two films which will be released this fall including Proof (based on the Pulitzer Prize-winning play and starring Gwyneth Paltrow and Anthony Hopkins) with Miramax. For more information visit www.endgameentertainment.com.

     

    ABOUT BRANDISSIMO!

     

    Brandissimo! Inc. is a family entertainment production and marketing company founded by David Snyder, Bill Gross, and Frank Fraser. Fraser is the former Creative Director of Disney Consumer Products. With CCI Entertainment and Collingwood-O'Hare Entertainment, Gross and Snyder are Executive Producers of Harry and His Bucket Full of Dinosaurs, part of Cartoon Network's new Tickle U pre-school lineup. In association with Producer/Director, Cleve Keller, Brandissimo! Inc. has also recently developed and produced a series of entertainment-focused music therapy videos and music CDs for autistic children, entitled Spectrum Connections.

     

    ABOUT METEOR THE MONSTER TRUCK

     

    Meteor the Monster Truck is a computer-animated cartoon property for energetic, pre-school aged children that celebrates rough-and-tumble play. Meteor and his friends live and play in the exciting, automotive-inspired world of Crushington Park, an all-American town where they learn critical lessons about growing up with other monster trucks. Meteor the Monster Truck Company, LLC was created by producers David Snyder and Bill Gross, and is being co-developed and produced with Endgame Entertainment, an equity production fund involved in film, TV and stage productions.

  • 'Truck' gets into gear

    August 28, 2005

    Endgame Entertainment and family entertainment producer Brandissimo! have partnered to develop and produce "Meteor the Monster Truck," a computer-animated cartoon property for preschoolers.

    "Meteor" chronicles the missions and dreams of a hard-playing group of young monster trucks, including Meteor, Jose, Junkboy and Ponytail.

    Twenty-six episodes are in production; they will be available on DVD in November.

    A feature film and additional projects, including toys and computer games, are in active development.

    "Because the entertainment and developmental needs of preschool-age boys are specific, we have created 'Meteor the Monster Truck' around boy play patterns. With an emphasis on delivering fun, these stories will teach young boys how to positively channel their physical energy and learn appropriate social boundaries," said David Snyder, one of the "Meteor" creators.

    Snyder and Bill Gross are children's entertainment specialists and former Walt Disney creative execs who worked on the preschool series "Thomas the Tank Engine" as well as other TV properties.

    Endgame, founded in 2003 and headed by James D. Stern, currently has more than 10 projects in production, with two to be released this fall, including "Proof," a co-production with Miramax, based on the Pulitzer Prize-winning play and starring Gwyneth Paltrow and Anthony Hopkins.

    Brandissimo! was founded by Snyder, Gross and Frank Fraser, the former creative director of Disney Consumer Products. With CCI Entertainment and Collingwood-O'Hare Entertainment, Gross and Snyder are exec producers of "Harry and His Bucket Full of Dinosaurs," part of Cartoon Network's new Tickle U preschool lineup.

  • Fortress takes on Poe thriller

    August 28, 2005

    Fortress Entertainment has optioned the Stephen Marlowe novel "The Lighthouse at the End of the World" and has hired Merritt Johnson to adapt the dramatic thriller based on the mysterious disappearance of Edgar Allan Poe.

    Jonathan Sanger ("Suspect Zero," "The Producers") will produce.

    "Lighthouse" concerns the disappearance of the 19th century American author and poet just prior to his death. In 1849, he was found in a Baltimore gutter, drunk and dying, after having been missing for a week.

    Fortress' Brett Forbes and Patrick Rizzotti will exec produce.

    Vet TV producers Marian Rees and Anne Hopkins, who previously bought the rights to the book almost a decade ago, brought the project to Fortress and will exec produce.

    Before teaming with Fortress, Rees and Hopkins worked with David Lynch (as an exec producer, not director) on the project, then being adapted by Christopher DeVore.

    Johnson was recently hired to write "Lovelace," the biopic starring Courtney Love as Linda Lovelace, the 1970's "Deep Throat" porn star, for Jason Blum's Blumhouse Prods.

    Fortress funded Endgame Entertainment's acquisition of Andy Behrman's "Electroboy," with Tobey Maguire attached to star, and has partnered with Thunder Road Prods. to produce "Bull," based on the true story of three celebrated bull riders.

    Shingle is also producing "Dreamtective," based on Elizabeth Swados' teen fantasy novel, with producer David Permut.

  • 'Beowulf' catches ride at Union Station

    May 20, 2005

    Union Station Media has acquired U.S. distribution rights to "Beowulf and Grendel" from Arclight Films. Pic is directed by Sturla Gunnarsonn ("Snakes and Ladders") from a script by Andrew Rai Berzins ("Chasing Cain").

    The cast includes Gerard Butler as Beowulf and Stellan Skarsgard.

    Filmed in Iceland, pic is based on the 9th century Anglo-Saxon poem, which tells the blood-soaked story of a Norse warrior's battle against a troll.

    "Beowulf and Grendel" is a co-production between Arclight Films, Endgame Entertainment, Spice Factory, The Film Works and the Icelandic Film Corp. Producers are Michael Cowan, Gunnarsson, Eric Jordan, Anna Maria Karlsdottir, Jason Piette and Paul Stephens.

  • Foreign Treasure

    May 8, 2005

    Like a mother who worries over a kid with the flu, industry watchers instinctively know the indie pic marketplace is getting better when everyone gets their appetites back.

    Foreign buyers are chipper, bolstered by a low dollar exchange rate. Sellers have stocked their larders with pics of all sizes, heavy on the genre and mainstream.

    Lions Gate Films, for example, is high on "Catacombs," the second film from the producers of "Saw." Universal Pictures will screen about 12 minutes of George Romero's "Land of the Dead" -- a film that, at another time, might have been dismissed as B-movie filler.

    However, the most promising sign of the times might be the willingness of several new sales companies to brave the wilds of the Croisette.

    Hyde Park Intl.

    Ashok Amritraj got his start in foreign sales, but until now he never wanted his 6-year-old Hyde Park Entertainment to handle its own foreign distribution. But seeing an opportunity in the marketplace -- with studios supplying fewer titles to indies overseas these days -- and some solid backing, Hyde Park Intl. was born. (Hyde Park's relationship with London-based funds manager Brass Hat Group allows HPI to act as sole financier and co-financier.)

    Ex-Franchise sales exec Lisa Wilson now heads HPI. Titles on the first slate include "Monkeyface," starring Richard Gere, and psychological horror pic "Premonition."

    "We will be 80% sold-out before we go to Cannes," Amritraj says. "But I think the market is quite vibrant internationally. The circle is coming around for the better product."

    Inferno Distribution

    When Bill Johnson and Jim Seibel's Inferno Distribution first went to Cannes in 2003, it was with modest ambitions: leverage a strategic partnership with (now-defunct) German fund Cinerenta and sell back titles from its library.

    By 2004, Inferno began to produce, which yielded romantic comedy "Just Friends" (New Line has North American rights) and the upcoming "Southland Tales," helmed by Richard Kelly.

    This year, Inferno comes to Cannes with a five-picture slate, which also includes Sobini Films' "Peaceful Warrior" and "Quattro Noza," and John Carpenter thriller "The 13th Apostle."

    "It just seemed like there were very few sales agents that were able to deliver theatrical movies to distributors," says Bill Johnson. "The fact that we had a library to sustain cash flow and a reason to talk to buyers and our relationships with the funds and international distributors made us believe that we can make it work."

    Sidney Kimmel Entertainment

    When Sidney Kimmel Entertainment opened its Los Angeles office in October, the announcement was greeted with a certain degree of skepticism. Kimmel's track record included executive producing "9½ Weeks" and "Clan of the Cave Bear," but he was best known as a philanthropist and founder of the Jones Apparel Group.

    Fast-forward six months, and Kimmel's expected to announce a foreign sales company at Cannes that will be headed by Mark Lindsay, who currently serves as senior VP at Miramax Intl. (Neither Kimmel nor Lindsay would comment on the development.)

    It's unclear what Lindsay might rep for his first go-round. Kimmel has wrapped three films that already have foreign sales reps: "Alpha Dog" and "Trust the Man" are with Capitol Films; "Neverwas" is with Mandate Pictures.

    ThinkFilm Intl.

    ThinkFilm's Jeff Sackman and Mark Urman approached Mark Horowitz in March about acting as their sales rep at Cannes on five titles: "Murderball," "The Aristocrats," "Protocols of Zion," "Lie With Me" and "The Last Mogul."

    "It's on a nonexclusive basis," says Horowitz, who, since leaving Alliance Atlantis Intl., has consulted for companies such as Endgame and First Look Media.

    "Notwithstanding how dangerous the marketplace can be, we think we can leverage our presence in the domestic market," says Sackman. "We want to come in earlier and acquire worldwide rights."

    Adds Horowitz, "It's kind of exciting for me to see how it goes. ThinkFilm has established itself in North America, so there's credibility."

  • Pic biz surfs next wave

    May 8, 2005

    HOLLYWOOD -- As with most every financial tool in the pic biz, once it's overused or abused, it gets taken away.

    That seems to be what's happening in Britain and Germany soon, where tax shelters of various stripes are being stripped or taken down.

    The U.K.'s sale-and-leaseback setup is under scrutiny and will look very different a year from now.

    The German situation looks more dire. The nation's finance minister recently proposed to do away with loopholes in the tax system that allowed, among other things, public media funds to invest in film productions. A large portion of the allocated money flowed to non-German pics (read: Hollywood) -- a reason why the issue has become such a political hot potato. Now the funds could be eliminated altogether, though some observers say parts of them could be saved.

    Whatever the outcome, these important sources of financing aren't as reliable as they once were, and it's forcing the pic biz (indies in particular) to seek out greener pastures.

    "A substantial number of films we finance rely on this soft money to get projects going," notes Jared Underwood, senior VP/manager at pic lender Comerica Entertainment Group. "But my guess is that, as always in the indie film business, when one door closes another one will open."

    "There's a huge opportunity in the marketplace right now for equity money to participate in indie film," says Matthew Thompson, a partner at law firm Stroock & Stroock & Lavan. "A lot of other financing has gone away, like insurance-backed finance. Presales have scaled back, and soft money is in a state of flux. So there is a big hole that can be filled with equity, and the people who can fill that hole can make a lot of money off it."

    Hollywood already has seen the influx of high-net-worth individuals -- including Bob Yari, Jim Stern, Jeff Skoll, Bill Pohlad, Mark Cuban, Todd Wagner and Sidney Kimmel -- but now there seem to be even larger forces looking to invest in the film sector.

    Not only are private equity funds sniffing around Hollywood, but hedge funds and other types of mezzanine players are joining the party.

    "What's different today over five years ago is that you now have financial investors who are looking at the film industry and interested in finding the right deal," says Isaac Palmer, senior VP of corporate development at Paramount Pictures. "That's a change because for a long time you couldn't get Wall Street invested in the film industry. "

    Observers point to Texas Pacific Group and Providence Equity Partners' involvement in Sony's purchase of MGM as recent evidence that the financial community's interest in film is a growing phenom.

    They also list Paramount's landmark Melrose Investors deal, a multi-million-dollar slate financing arranged by Merrill Lynch that included a mix of institutional investors.

    And, as if neatly underlining this trend, Palmer will be exiting Par in July to head up a newly established Los Angeles outpost of Fortress Investment Group, a $15 billion asset management firm that will be looking at entertainment and media.

    Palmer has worked on many of Par's German funding deals over the years and also was a key negotiator on the studio's Melrose deal. "There are a number of film deals, though not exactly structured like Melrose, that are winding their way through the market right now," he adds.

    In a separate development, Merrill Lynch just concluded a deal to finance a Marvel pic slate to the tune of up to $525 million over seven years. (Paramount was assigned as the domestic distrib in the deal.)

    But what's behind this new vote of the confidence from the financial community?

    Most observers point to the lackluster stock market as a big reason why investment firms and hedge funds are looking elsewhere. And since the coming (and going) of the Internet gold rush, many wealthy individuals and groups are looking to place their money.

    "We have a lot of hedge fund managers in Endgame," notes Stern, clarifying that his company is backed by a group of investors, not just his own capital. "People have done well financially over the last few years. There's been a rebound (since the dot-com's bubble burst). And, you have to remember, some people didn't invest in Internet at all."

    Meanwhile, investors in all areas are more secure in the thought of pouring money into Hollywood because there have been a few precedent-setting deals and there are numbers to work off.

    Film libraries -- and their potential exploitation over myriad (and multiplying) distribution platforms -- are judged as viable assets, and potential deals now can be rated. DreamWorks' recent film securitization deal and Par's Melrose got credit ratings, indicating that the senior debt in the deals was investment grade.

    "With each deal, Wall Street, big banks, mezzanine funds and private equity funds get more comfortable with films as an asset class," says Palmer. "They're applying economic modeling techniques, where you can look at a film library and assess the risk of loss."

    With every new wave of money, however, industryites caution that it won't be around for long, unless it is treated with due deference.

    Says Stern, "People who are able to commit, protect and respect the money stay in the business."

  • Sophia Bush, Adam Goldberg, Milo Ventimiglia

    May 4, 2005

    Sophia Bush ("One Tree Hill"), Adam Goldberg ("How to Lose a Guy in 10 Days"), Milo Ventimiglia ("American Dreams") and Jimmi Simpson ("D.E.B.S.") have joined the cast of horror-thriller "Stay Alive."

    Steve Zahn, Frankie Muniz, Samaire Armstrong and Jon Foster star in the pic, about a deadly vidgame. It's directed by William Brent Bell and co-produced by Spyglass Entertainment, Endgame Entertainment and McG's Wonderland Sound & Vision.

  • Thesps make 'Comeback'

    April 11, 2005

    Ray Liotta, Shaun Sipos, Rachel Blanchard and Glenne Headly will star in the family comedy "Comeback Season," written and directed by Bruce McCulloch.

    Endgame Entertainment is co-financing the film, with Myriad Pictures handling worldwide rights outside Canada. ThinkFilm will distribute in Canada.

    Liotta plays a man who cheats on his wife and moves in next door with the local high school football star, as they both try to win back the hearts of the women they love. Production begins May 9.

    Kirk D'Amico exec produces alongside James D. Stern and Jeff Sackman. Susan Cavan and Shirley Vercruysse produce the pic.

    McCulloch's credits include "Kids in the Hall," "Stealing Harvard," "Superstar" and "Dog Park."

  • Muniz, Foster, Armstrong Try To 'Stay Alive'

    April 7, 2005

    Frankie Muniz, Jon Foster and Samaire Armstrong will topline the horror thriller "Stay Alive." Spyglass Entertainment is boarding the project as a producer and financier.

     

    Spyglass will jointly finance and produce the film with Endgame Entertainment in exchange for worldwide rights. McG's Wonderland Sound & Vision shingle also is producing.

     

    Marking a departure from his "Agent Cody Banks'" films, Muniz is set to play computer nerd Swink Sylvania; Armstrong will play Abigail; and Foster plays the lead, Hutch, a handsome video gamer with a secret.

     

    Brent Bell will direct from a script by Bell and Matthew Peterman that follows a group of young friends in New Orleans who reconnect for the funeral of a friend who died while playing a video game called "Stay Alive." They discover that the murders are being acted out in real life by the spirit of a local legend that might have come through the game with murderous intentions.

     

    "We are excited to be making this film with Jim Stern and McG and the director," Spyglass chiefs Roger Birnbaum and Gary Barber said in a statement. "We have flirted with doing a genre horror film for a long time and waited for the right one with potential for breakout on a worldwide basis."

     

    "We are thrilled to be producing the film and to be able to work with Gary and Roger and McG and Peter (Schlessel), and think it's a great project," Endgame's Stern said.

     

    The producers on the project are McG, Schlessel, Barber, Birnbaum, Stern, Peterman and Bell. The co-producers are David Manpearl, Erin Stam, Anna Mastro and Stephanie Savage. Adam Del Deo is serving as executive producer with Jonathan Glickman and Doug Hansen. The film starts shooting next month in Louisiana.

     

    Muniz is repped by Michael Rotenberg at 3Arts and ICM. His credits include "Deuces Wild" and "Big Fat Liar."

     

    Armstrong is represented by ICM, her manager is Loch Powell at Leverage Management and her attorney is Rick Genow at Stone Meyer Genow. Her credits include "The O.C." and "Entourage," and she is shooting "Just My Luck" opposite Lindsay Lohan.

     

    Foster is repped by WMA and Ken Jacobson. His credits include "The Door in the Floor" and "life as we know it" and the upcoming pilot "Ticket to Ride."

  • H'wood goes on Yari safari

    February 27, 2005

    He's put money into 16 movies in the last two years. In the process, he's become one of the industry's major enigmas.

    With financiers for independent film becoming an endangered species, Bob Yari currently stands as the busiest backer in the business. But producers can't quite figure out how he does business. Or why he's in the business to begin with.

    Or what kinds of movies he really wants to make. Yari is backing a wide slate of esoteric pics -- a Somerset Maugham adaptation and a look at Andy Warhol superstar Edie Sedgwick. But his next release is the $65 million "Hostage," a meat-and-potatoes actioner starring Bruce Willis.

    The big question: Will he go bust before his eccentric business model can achieve results?

    The film biz is used to money men who come to Hollywood with dreams of acquiring gold, glory and girls. His dream is to build a money-making empire on the back of arthouse movies. It's a noble aspiration, but in the process he's inspired both fierce loyalty and foaming-at-the-mouth contempt.

    One former associate describes him as a scoundrel. Another grimaces, "I don't know anybody who's had a great experience with him." Supporters say those people are just frustrated that he's not backing their projects.

    Sitting in his Westwood office, the exec acknowledges that his community relations have hit some rough patches. "We're working on it," he says. "I won't be in business without them. But in terms of certain people being upset, I'm not sure we can avoid that ultimately."

    Yari, who's in his early 40s, has close-cropped hair and translucent skin stretched over an owlish face. He speaks in soft, measured tones. He looks less like a Hollywood player than like the real-estate magnate he used to be.

    Hollywood has its share of rich guys with cinematic ambitions, with a current crop that includes Chicago Bulls co-owner Jim Stern's Endgame Entertainment, eBay founder Jeff Skoll's Participant Prods. and schmatta magnate Sidney Kimmel, who heads Sidney Kimmel Entertainment.

    Unlike them, Yari has created a huge output. And, unlike them, he is a principal in no fewer than five companies.

    There's financing arm Stratus Film, a partnership with Mark Gordon. There are also four shingles that fall under the Yari Film Group: El Camino Pictures, a financing entity created in association with William Morris Independent; his own discretionary fund, Bob Yari Prods.; and production company Bull's Eye Entertainment, a partnership with Tom Nunan and Cathy Shulman. There's also foreign sales arm Syndicate Films Intl., headed by David Glasser. Soon there will be a video distribution label, to be followed by a domestic distribution company.

    With 50 employees, that's a lot of overhead for just two years in business, especially since Yari's track record is virtually nonexistent. El Camino's "A Love Song For Bobby Long" earned a Golden Globe nom for Scarlett Johansson but negligible box office; Bull's Eye's "Employee of the Month" went straight to video.

    Yari hopes to see that trend reverse itself in the coming months. He plans to see at least eight theatrical releases through 2005, including "The Matador" through Miramax, "Prime" and "Winter Passing" through Focus Features and "Crash" and "House of D" through Lions Gate Films.

    Yari theorizes that he has so many critics because his purpose is less about making movies, or even making money, than about building an empire. His lofty goal is to create a full-fledged independent studio, the like of which hasn't been seen since the pre-Disney days of Miramax.

    In other words, even his motives seem contradictory: He wants to be an auteur-empire builder.

    Yari's business plan calls for an annual slate of at least 10 films. Fewer films, he says, would throw his risk-reward ratio into jeopardy. "We're not dependent on individual performance to recoup. We don't risk the core equity."

    Yari says he also doesn't want to risk falling into the same category as Elie Samaha, an indie producer whose Franchise Films was known for making movies of dubious quality. "That's a business, but it's not one we want to be in," he says.

    Even Yari's supporters say that his greatest weakness has been overcoming his naivete about the film biz. And he admits that his productions have often suffered for it.

    "We've honored obligations, but we've been plenty late," he says. "One of the things I'm learning is there's always some delay with the banks. I don't think we've ever closed a deal before two weeks before the end of production. When you have three or four projects, that's put us under a lot of cash flow strain. But that's a reality and I have to adjust my expectations." That adjustment has taken a toll on some of his partners.

    Groans one producer currently working with Yari, "He has all these companies fronting for him, so you never know when the money is coming. You're trying to close a deal and he isn't open about what's going on. But at a time when there's no one else, you do what you can."

    One agent whose below-the-line clients have worked on a number of Yari pics adds, "Even the pictures that get made, there's a trail of blood and guts along the way. On one film, we had signed deals with guarantees and he wouldn't pay. We finally settled for 50 cents on the dollar. A client fired us over it. I do my best not to do business with him, but it's hard because he makes interesting movies."

    Although Yari's slate focuses on arthouse pics, his projects rely on the same financing principles that back many direct-to-video thrillers at the American Film Market: foreign sales. Making those numbers work has become increasingly tough for all movies, especially for pics that don't substitute explosions for character development.

    "I think I'm not a bad judge of material and I want to support directors," Yari says. "But to give them the ability not to be micro-managed, how do I protect us? Things have to fit in our box. That's what gives me the ability to implement their vision."

    He has a reputation for greenlighting a movie and then later changing his mind. And, producers charge, his deals take forever to close because he constantly changes the terms. According to Yari, the problems come when he thought a vision fit the box, only to find it didn't.

    Last fall, Bull's Eye hoped to make "Tishomingo Blues," an adaptation of an Elmore Leonard novel, as Don Cheadle's directorial debut. However, when the budget kept creeping up and the foreign presales kept moving down, Yari pulled the plug.

    "Was it (topliner) Matthew McConaughey? I don't know, but the support wasn't there," Yari says. "It's regrettable, but to move forward would jeopardize the whole business plan."

    Yari faced a similarly awkward scenario in 2003 with the Stratus spoof "Remains of the Piano," which was written by Eric Idle as his feature directing bow. "I've never met him, but I know Idle was very upset," Yari says. "He was furious."

    The "Piano" problem came when the bank saw that he intended to produce the film with Garth Drabinsky, co-owner of the bankrupt Livent. "I didn't know about Garth Drabinsky," Yari says.

    Didn't know about Drabinsky?

    It's possible that Yari hadn't spent enough time in Hollywood to learn that his would-be producing partner was awaiting trial on $400 million in fraud and insider-trading charges. But shouldn't he have received a heads-up from Stratus president Neil Sacker, a former top business exec at Miramax and Destination Films? Or from Glasser, who's spent nearly a decade in foreign sales?

    Yari is making his second go-round in Hollywood. After earning a degree in cinematography from UC Santa Barbara in the early 1980s, he directed the 1989 thriller "Mind Games" starring Maxwell Caulfield. When the MGM release earned just $85,000 in a 200-screen bow, he turned away from Hollywood to focus on his dad's real estate business, where he found considerably more success. However, Yari doesn't want to be known as a real-estate developer-turned-producer.

    "Real estate and film deals are very similar in terms of structuring," he says. "The big difference is that an entrepreneur in independent film is a different animal than in real estate. Producers have all the requisite business skills, but their definition of success is you make the film, get your name on the picture and take the fee. You do that, you've made 90% of your goals. In real estate, you put up a building and it's not profitable? That's not a feather in anyone's cap."

    Yari's slate includes the kinds of movies that seem almost impossible to get made -- period dramas, dark comedies, quirky biopics.

    Now shooting is El Camino's psychological thriller "First Snow" starring Guy Pearce and "Jump Shot," an ensembler about gambling addiction that's going through Bob Yari Prods.

    Among the pics expected to roll this year are the Sedgwick biopic "Factory Girl," also through Bob Yari Prods.; Stratus' remake of Maugham's 1934 Greta Garbo starrer "The Painted Veil," to star Edward Norton and Naomi Watts for release through Warner Independent Pictures. Also up is Bull's Eye's "The Illusionist," an adaptation of a short story by Steven Millhauser that stars Norton and Paul Giamatti.

    With studios scared of anything that doesn't have the potential for Roman numerals, Yari sets out a tempting spread for hungry producers. And supporters say that any grousing is just the cost of doing business.

    "I've made five pictures with him," says William Morris Independent and El Camino principal Cassian Elwes. "He said, 'I'm going to do them,' and he did them. You're going to go through some growing pains and growth curves. I think that he's learned a lot in the two years. Lots of people are desperate to make their independent movies and they're frustrated that Bob's not making their movie."

    "The Illusionist" producer Michael London says he's happy to work with Yari.

    "I heard all of those stories and I know they're true, but he's trying to rectify them," London says. "He made a lot of $10 million-and-under movies and it's really clear that the ground rules (with "Illusionist") have to be different. Here, our budget is $17.1 million. There's more riding on it.

    "I think he's guilty of spinning a lot of plates at the same time, but I credit him for having eclectic tastes," he says. Most guys are only looking for the safest haven for their money."

  • Endgame, McG 'Alive' to horror

    January 9, 2005

    McG’s production shingle Wonderland Sound & Vision has teamed up with James Stern’s Endgame Entertainment to co-produce horror pic “Stay Alive.”

    Pic will be financed by Endgame and is expected to start shooting in March in New Orleans.

    To be directed by Brent Bell, pic is about a group of New Orleans teens who play an online horror videogame; as their characters die in the game, the players die also.

    Pic was scripted by Bell with Matthew Peterman. McG, Peterman, Peter Schlessel and Stern share producing credit on the pic, with Wonderland’s David Manpearl as co-producer.

    Vidgame producer American McGee will design all the game effects for the movie and consult on its production. Morris Paulson’s Base 2 Studios will handle visual effects for the pic.

    Wonderland has a first-look film deal with Columbia Pictures, but it’s not yet clear who will distribute “Stay.”

    Shingle also is developing pics “Revenge of the Nerds,” “Hot Wheels” and “Evel Knievel.”

    Endgame recently completed production on “Proof” in association with Miramax Films and “The Alibi” with Summit Entertainment.

    Bell and Peterman have a number of other pics set up, including techno-spy thriller “Mercury,” at Universal with Gale Anne Hurd’s Valhalla and f/x studio Digital Domain producing; “Ignition,” a kids action-drama set up at Warner Bros., which Cosmic Entertainment is producing; and “Illusion,” an action thriller at Disney with Jonathan Frakes directing.