Fox’s Roth looking around amid contract uncertainty

Twentieth Century Fox chairman Joe Roth is vigorously exploring independent production options as it appears less and less likely that his boss, Rupert Murdoch, will agree to pay the studio chief enough to keep him.

Roth’s agent, Creative Artists Agency heavyweight Michael Ovitz, is said to be in serious powwows both with Disney and Sony Pictures about a potential partnership with one of the two companies. There is also speculation that Murdoch–as a way to hedge his bets–will offer Roth an attractive indie deal.

Some insiders speculate that if Roth leaves Fox, he’s most likely to land at Disney since his filmmaking philosophy is more in sync with studio toppers Jeffrey Katzenberg and Michael Eisner.

But there are others who believe Roth would opt for Sony if it offered a richer, more autonomous deal.

The probable departure of Roth raises the question of who Mur

doch will name as successor and what will happen to Roth’s key exex–production prexy Roger Birnbaum and exec VP Tom Jacobson; Fox prexy Strauss Zelnick and executive VP Tom Sherak, who’s been at the studio for 9 1/2 years.

Speculation runs the gamut of everything from Murdoch possibly offering Fox Entertainment Group prexy Peter Chernin the post to upping either Birnbaum or Zelnick, or simply freezing the structure and having everyone report directly to him, at least for an interim period.

Like Roth, both Zelnick and Jacobson are walking around with expired contracts.

A knowledgeable source described the kind of studio partnership that Roth is seeking as “very independent,” one that would enable him to make five pictures a year under his own company banner and retain control over his own destiny.

Interestingly, when Roth decided to leave Morgan Creek three years ago, his initial conversation with former Fox chairman Barry Diller concerned setting up a five-picture-a-year indie, but Diller convinced him to run the studio.

One scenario being spun around a potential Sony deal is that TriStar would be divided into three separate production entities, to be run independently by Roth , Dan Melnick and Castle Rock Entertainment, while the studio would become strictly a marketing/distribution entity through which their product would flow.

Sources say Roth, whose Fox contract expired at the end of July, has openly told Murdoch that he would be checking out other possibilities in the industry.

Insiders say Roth is demanding to be paid as much as other Hollywood studio chiefs and wants a bigger share of Fox’s profits. Murdoch reportedly refuses to budge on the latter point.

According to an informed source, when Diller hired Roth he had guaranteed him a percentage of any increase in profits, reportedly around 3%. Roth is reportedly asking Murdoch for 5%.

Murdoch is “certainly not prepared to give him that increase,” another source said. “His world view, in general, is that employees don’t get to participate.”

In fact, it was that issue that reportedly stood between Murdoch and Diller, who explained he was leaving Fox because he wanted to be an “actual principal in the business activities with which I was associated” (Daily Variety, Feb. 25).

While some Fox insiders insisted that talks between Roth and Murdoch collapsed over the weekend, one person close to the studio chief claims the two didn’t even discuss the issue then. Another source suggested that Murdoch “kept delaying the conversation with Roth last week, and Joe’s been very angered and frustrated by it.”

Murdoch is in New York this week and due back Monday.

Roth’s fate is expected to be decided within the next week. One informed Fox insider stressed that unless Murdoch does a complete about-face, Roth “will definitely be moving on.”

In February, on the day that Diller resigned, Roth told Murdoch he would stay on through the end of the year for the release of “Home Alone 2,””Toys” and “Hoffa.”

Although those close to Roth say he enjoys the status and power that comes with being a studio head, he’s quite willing to forfeit them if Murdoch won’t step up to the plate. Roth stands to make a lot more money in an indie deal–if his movies are successful–than if he stayed at the studio.

At Morgan Creek, Roth split profits 50-50 with his former partner James Robinson and reportedly took a salary cut to go to Fox. A source estimated that Roth was guaranteed a base salary of about $ 1.3 million when he went aboard.

While Roth has been offered other studio jobs, he has long made it clear that he is not interested in taking one and would just as soon rejoin the indie ranks if he doesn’t stay at Fox. Roth’s three years there represent the only time he hasn’t been his own boss.

One close observer of Roth suggested that his beef with Murdoch is “a combination of money and frustration in dealing with someone whose attitude is that of an owner who has control and has a lot to say when he doesn’t really understand the movie business.” Murdoch, added the source, “does not hesitate to second-guess” Roth.

A source close to Murdoch said, “This is a business where management is more valuable than capital. And certainly, film executives like Joe Roth are in shorter supply than capital. But Rupert is a traditional businessman and doesn’t see it that way. He doesn’t think anyone is indispensible.”

Like any studio topper, Roth has had his share of box office disappointments, but under his reign Fox has enjoyed its two best years in the studio’s 77-year history. Fiscal ’90 was Fox’s most successful year by 50%, greatly due to the theatrical release of “Home Alone,””Die Hard 2,””Sleeping With the Enemy, “”Marked for Death” and “Edward Scissorhands.” Fiscal ’91 was Fox’s second most profitable year, thanks to the homevideo release of “Home Alone” and the theatrical release of “My Cousin Vinny,””Hot Shots” and “White Men Can’t Jump.”

Fox insiders project that with the strong performance of “Last of the Mohicans” and anticipated profits from the upcoming holiday releases “Home Alone 2,””Toys” and “Hoffa,” plus next year’s offerings “Rising Sun” and “Hot Shots 2” (Memorial Day), 1992 could be the biggest yet.

Roth has already lined up 22 movie releases for Fox’s 1993 slate. “While the good news is that Joe has already put together a release schedule for next year, unfortunately his success could also be his downfall and in a strange way can end up hurting him because Murdoch can be tougher in what he does with a year of product in line,” observed one Fox executive. ]

Another Fox insider said that even though Roth and Murdoch are far apart on money, and in the last few weeks Roth has acted as though he knew he’d be leaving, the movie chief has not stopped being actively involved at the studio.

In addition to being instrumental in the marketing campaigns for “Home Alone 2,””Hoffa” and “Toys,” Roth has been setting up such projects as “Angie, I Says, ” a book adaptation that Madonna will reportedly star in as a young Brooklyn woman who faces the struggles of being a single parent. Fox hopes to start production in March for a Thanksgiving release.

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