The film industry valiantly rode out the recession in 1992, managing to stay in the saddle despite occasional upsets, and posting its third-best year. Some big bucks came from sequels “Home Alone 2” and “Batman Returns” but major profits accrued from breakthrough originals such as “Aladdin,””Sister Act” and “Wayne’s World.”
For the second year in a row, WB slid past Disney into first place, though both significantly increased their market shares to almost 20% apiece.The combined Sony Pictures Entertainment group of Columbia, TriStar, Sony Pictures Classics and Triumph had a 19.6% share, a good part of which came from fourth-place Columbia (12.5%). Fox climbed to third with 14.2%, better than any studio showing in ’91. Those four companies accounted for almost 75% of all movie business.
Universal held about even with 11.7% and Paramount slid to 9.9% from third place to sixth.
Overall, production budgets declined, with a few notable exceptions such as WB’s “Batman” sequel, Universal’s “Far and Away,” and Fox’s “Alien3.” But they were balanced by low-budget winners such as Disney’s “3 Ninjas” and “The Mighty Ducks,” Columbia’s “A River Runs Through It” and U’s “Beethoven.”
The battle of marketing cost bulges, however, gained little ground and is now seen as the single most stubborn industry problem — one for which no one seems to have a solution.
In what has become almost an annual tradition, there were more senior executive musical chairs last year as both Paramount and Fox replaced departing overlords. The maxim that management and in-house development are vital to performance were justified by the track record of Warner Bros. and Walt Disney Studios, which led the league in at-bats and hits.
WB, which lost its guiding light in Time Warner chairman Steve Ross, who died in December after a long battle with cancer, has Hollywood’s longest-lived senior exec team in Robert Daly and Terry Semel and continued hale and hearty with its usual eclectic mix including the “Batman” and “Lethal Weapon” sequels, and more significantly with surprise performers such as “The Bodyguard,””Under Siege,””Passenger 57” and the Clint Eastwood comeback stunner “Unforgiven.”
It’s unclear whether the shake-up of the TW board on the heels of Ross’ demise will have any ramifications on the film division. If its corporate parent adheres to the “if it ain’t broke” philosophy, WB should continue its consistent market-share dominance.
Disney chairman Jeffrey Katzenberg largely continued to pin tails on the same donkeys–high-concept, low-budget comedies and splashy animation spectaculars. The combination brought profit-a-plenty to the almost decadelong reigning team at Disney.
But except for Interscope’s “The Hand That Rocks the Cradle,” efforts to expand into other genres were largely duds. In the coming year, however, in-house producers like Don Simpson and Jerry Bruckheimer and newly signed ex-Fox head Joe Roth, could help broaden the Disney base.
But the long-term management dictum was also contradicted by Universal, TriStar and MGM, which with executive personnel largely intact, were hobbled in their efforts to create enough low-risk, high-grossers to register major profits.
Universal, under the aegis of Tom Pollock, had some medium-range performers like “Sneakers” and a profitable pick-up in “Fried Green Tomatoes.” Too frequently, though, films underperformed in respect to bloated budgets. In a belt-tightening move, Pollock has promised to bring budgets more in line, which portends for a better ’93.
TriStar’s Mike Medavoy was mysteriously low-key, largely sitting out the attendance-heavy summer and Christmas season and scoring the division’s main hit with Carolco’s “Basic Instinct.” With the signing of peripatetic producer Scott Rudin and Daniel Melnick’s Indie Prod. Co., as well as spurts of aggressive script acquisitions, TriStar could enjoy a larger presence in the coming year.
Whatever could go wrong at MGM, did. The only studio owned by a bank was plagued by woes dating back to its acquisition by Giancarlo Parretti. Alan Ladd Jr. tried to keep his head while all around him were losing theirs, but was buffeted by the studio’s low-on-the-food-chain ranking.
MGM’s market share plummeted to below the indie New Line. Recovery could come in the studio’s recent investment in Carolco, which takes effect in 1994. A hit or two in the coming year would also help soothe the savage Credit Lyonnais beast.
Even though Mark Canton was still fresh to the job of Columbia chairman at the beginning of the year, his transition period was aided by some gems in the rough left behind by ex-chairman Frank Price, including the $ 100 million-plus grosser “A League of Their Own.” Canton didn’t turn a deaf ear to in-the-hopper properties, buying himself some valuable time while laying out his own blueprint.
The future of Fox is in flux as the studio lost chairman Barry Diller and senior exex Joe Roth and Roger Birnbaum. The team, though it had several missteps, was responsible for the studio’s two most profitable years. The “Home Alone” bonanza duet was joined by less predictable hits like “The Last of the Mohicans” and “White Men Can’t Jump.” The studio’s fate under new studio head Peter Chernin will depend not only on his ability to continue to foster strong alliances with top filmmakers, but on hands-on company owner Rupert Murdoch’s disposition.
The crystal ball on Paramount is also cloudy, after a down year marked by the intermittent highs of “Wayne’s World” and “Patriot Games” and yet another management shuffle. Fledgling studio head Brandon Tartikoff resigned after only 15 months at the helm. Since it takes a year to 18 months for any studio chief to settle in, the timing was unfortunate and saw Paramount’s usually strong market share plummet.
Producer and former Fox production president Sherry Lansing slipped into the breech and insiders predict that her consanguinity with parent company ruler and former partner Stanley Jaffe will go far in getting the studio quickly back on track.
Triumph on the film side for capturing the No. 1 spot in box office market share for the sixth time in 11 years, and three out of the last four years.
Tragedy on the human side for the death of its charismatic leader Steven J. Ross.
His loss, so traumatic to the media giant’s core, is rumored to have sparked a move to shrink the size of parent company Time Warner’s board, despite the current board’s denial that the two events are linked.
While Ross and his heir, co-chief executive Gerald M. Levin, maneuvered across the globe to make the corporate parent a stronger entity, WB exex in Hollywood were maneuvering to build their lead in this year’s market share.
And while the studio didn’t ink any new talent deals as it did in ’91, WB’s strong B.O. performance was due, in part, to some established relationships with such stars and filmmakers as Kevin Costner, Mel Gibson, Clint Eastwood, Joel Silver, Richard Donner, and Arnon Milchan’s New Regency or Jim Robinson’s Morgan Creek, to name a few.
Some of those longterm relationships gave WB the muscle to pack the summer with such blockbusters as “Batman Returns,” which grossed more than $ 162 million; the Mel Gibson starrer “Lethal Weapon 3,” which captured over $ 144 million; and Clint Eastwood’s “Unforgiven,” which harnessed over $ 74 million, and counting.
Those were followed by “Passenger 57” and the Steven Seagal hit “Under Siege” in early fall.
WB graced the Thanksgiving holiday with Spike Lee’s “Malcolm X” biopic, which has grossed more than $ 44 million to date. And WB spiked that performance with other Christmas season openers, “The Bodyguard,” starring Kevin Costner and Whitney Houston, which has made an impressive $ 88 million-plus in box office revenues, and “Forever Young,” with $ 33 million-plus to date.
But WB’s strong year had its share of duds as well.
Among the disappointments were the pickup “Christopher Columbus–The Discovery,””White Sands,””Turtle Beach,””Power of One,””Mambo Kings,””Freejack” and “Mom and Dad Save the World,” to name a few.
WB president Terry Semel, however, expects to quicken the production pace for ’93, boosting the output to 30 films from 25 in 1992. Nonetheless, the schedule is expected to mirror ’92’s basic strategy, with three main Christmas releases and four main summer pix.
“Looking back at the year, I have to say that (’92) was certainly the biggest we ever had internationally. At the end of November we closed up well over $ 750 million in international box office alone,” Semel said. “It has been a phenomenal year for us, especially considering current market conditions. And the results for some of our releases this year are still too early to call.”
Among those he thinks will ultimately turn out in the plus column after less than stellar starts are “Forever Young” and “Malcolm X.”
WB’s performance at the box office captured the praise of critics and Time Warner shareholders, groups that were critical of some of Time Warner’s other moves, particularly involving Ice-T’s “Cop Killer” song and Madonna’s “Sex” book.
Still, Time Warner exex have managed to appease shareholders with a strong balance sheet, thanks largely to WB’s stellar performance. TW closed its third quarter ended Sept. 30 in the black with net profits of $ 6 million against last year’s $ 62 million loss.
The studio’s first eight releases of the year included such forgettable performers as “Radio Flyer,””Falling From Grace,””Under Suspicion” and “Gladiator,” but its last nine releases included seven titles that grossed upward of $ 30 million each–“A League of Their Own,””Mo’ Money,””Single White Female,””Honeymoon in Vegas,””A River Runs Through It,””Dracula” and “A Few Good Men.”
“From July through the end of the year, we were the number one studio,” said Columbia chairman Mark Canton. “Given the fact that we had a healthy but not inordinate amount of releases–19–I think we’ve had almost an inordinate amount of success.”
Overall, Colpix jumped from seventh place and a 9.1% market share in 1991 to fourth place with a 12.5% market share in 1992. The studio’s cumulative gross in 1992 was $ 572 million.
While the final tallies were more than solid, Columbia’s slow start sparked uncertainty and management changes at the studio. In April, Paula Silver was ousted as marketing president and former Paramount executive Sid Ganis was brought in as Canton’s right-hand man in charge of marketing and distributing Columbia product.
In May, the Columbia restructuring continued as 11-year distribution president Jimmy Spitz was replaced by Jeffrey Blake–a longtime Ganis ally lured to Columbia from Paramount Pictures. The wholesale changes in Columbia’s senior marketing and distribution management set the stage for the studio’s strong second half.
The first bona fide hit of 1992 proved to be the July 4 release “A League of Their Own,” which relied on aggressive marketing to give it legs. Earmarked by the industry as a tough sell, because it featured women playing baseball, “League” opened on July 4 and rolled through the dog days of August on its way to $ 107 million at the box office.
Canton said “League” would prove to be Columbia’s first foray into “counter programming”– the studio’s offbeat answer to such summer actioners as “Batman Returns,””Lethal Weapon 3” and “Patriot Games,” which were all beginning to sag when “League” opened.
The studio also scored at the end of the year, opening the Christmas season with the front-running Nov. 13 release “Dracula” and ending its Christmas season with the Dec. 11 release “A Few Good Men.””We knew when to go first and we knew when to go last,” Canton said.
And sometimes the studio knew when it shouldn’t go at all. In one of the year’s most controversial decisions, Columbia postponed the release of Martin Scorsese’s “The Age of Innocence” from a Christmas opening to this fall in order to give the director more time to edit the pic. Originally budgeted at $ 30 million, the decision to delay “Age of Innocence” added nine months of interest expense to the cost of the movie.
The cost of movies would prove to be one of Canton’s primary concerns during the year. By August, Canton had greenlighted 12 movies for 1993, including 1992 ‘s single largest production–director John McTiernan’s “The Last Action Hero” with Arnold Schwarzenegger in the starring role.
The early production activity prompted second-half reports that Columbia was finished buying product until early 1993. The studio officially denied reports of a spending moratorium, while Canton said Columbia could add two or three pictures to its 1993 release schedule.
Even if Columbia turned cautious, it was not before the studio lined up a potentially lucrative ’93 slate. In addition to “The Last Action Hero” and “The Age of Innocence,” Columbia had already lined up a potential sleeper hit in “Groundhog Day,” the Bruce Willis starrer “Striking Distance,” director John Singleton’s “Poetic Justice” and the Clint Eastwood starrer “In the Line of Fire.” Columbia’s release schedule shapes up as one of the strongest of the year.
The promising outlook and past success has 43-year-old Canton setting his sights on the toughest challenge of all in the movie business: building a dynasty at Columbia.
“The whole goal here is to build consistency of success and continuity of management,” Canton said. “And we’re on it day and night.”
Much like 1991, Par suffered from executive shuffling and more studio belt-tightening. Unfortunately, none of this was to Paramount’s benefit, as the studio saw its market share slip from 12% to 9.9% as it dropped in ranking from third to sixth place.
With a new management team in place that included chairman Brandon Tartikoff, who joined Par in 1991, this past year was looked at as a transitional one for the studio and that’s pretty much what it turned out to be. Paramount only had one film that grossed more than $ 100 million and only two other films grossed over $ 70 million. Most of the others, including several that were high-budgeted , were downright duds.
Paramount’s biggest grosser of the year was “Wayne’s World,” the spin-off from “Saturday Night Live” that grossed $ 121.7 million. Next in line was the second installment from Tom Clancy, “Patriot Games,” followed by Eddie Murphy’s “Boomerang,” which grabbed $ 70 million, somewhat of a disappointment for a Murphy vehicle.
The rest of Paramount’s 1992 releases did not fare nearly as well. Disappointments included “Juice,” whose release led to violence in several theaters around the country, “Lady Bugs,””Cool World,””School Ties,””Jennifer 8” and the animated “Bebe’s Kids.”
Others on the underachieving list include Ridley Scott’s fast-sinking “1492: Conquest of Paradise,””Bob Roberts,””K-2” and the Marx Bros. rip-off “Brain Donors,” which didn’t even break the $ 1 million mark.
If most of Paramount’s movies didn’t shake up Hollywood, the rumblings in the executive suites certainly did.
The biggest jolt was Tartikoff’s sudden resignation as chairman in October. Citing family obligations, he left his post after only 15 months.
Less than a week later, Par tapped Sherry Lansing for its newly created position of chairman of the studio’s Motion Picture Group. Unlike Tartikoff, Lansing does not oversee the television group: Kerry McCluggage has that job.
With the appointment of Lansing, much of the moribund attitude that had enveloped the studio seemed to evaporate.
Lansing immediately put the studio into high gear scooping up a Joe Eszterhas project, “Jade,” for $ 2.5 million and signing such high-profile filmmakers as Frank Marshall and Kathleen Kennedy to a production pact. Earlier in the year, the studio entered into deals with others, including Howard Koch Jr., while extending the pact of Lorne Michaels, the mastermind behind “Wayne’s World.”
Par also signed a development deal with Tom Cruise and his producing partner Paula Wagner. Reportedly, Cruise will make his directing debut with a Par project.
But while the studio was snapping up successful filmmakers, it also lost one when prolific producer Scott Rudin announced that he was leaving to set up shop at TriStar.
As for Par’s 1993 slate, the studio will release three highly anticipated sequels–“Beverly Hills Cop III,””The Addams Family 2” and “Wayne’s World 2,” which should help get the studio into high gear. Other high profile films include the Tom Cruise starrer, “The Firm” and the Joe Eszterhas-scripted “Sliver,” which stars Sharon Stone in her first role since “Basic Instinct.”
Perhaps as a holdover from the Tartikoff philosophy of pushing television concepts onto the big screen, a la “Wayne’s World,” Paramount will release “The Coneheads,” another spinoff from “Saturday Night Live,” and is developing a “Brady Bunch” movie.
Nearly everything that could hamstring the studio did, including the financial woes of key supplier Carolco Pictures, wholesale changes in its production ranks, director Woody Allen’s custody battle with Mia Farrow, trouble bringing “Wilder Napalm,””Sniper” and “Mr. Jones” to market and speculation about the status of studio chair Mike Medavoy.
By far the studio’s largest box office success of 1992 was “Basic Instinct,” which provided TriStar with its first taste of controversy during the year. Protested by gay rights organizations, TriStar stuck to its guns with a wide release. The pic went on to gross $ 117.5 million at the domestic B.O. and racked up big dollars internationally.
Despite the “Basic” facts, TriStar’s overall results were disappointing. During the year, the studio slipped from a 10.9% market share with 13 releases in 1991 to a 6.6% market share with eight releases in 1992. Its cumulative B.O. gross was $ 310 million in 1992, vs. $ 475 million in 1991.
TriStar’s second-biggest picture of 1992 underscored the trouble the studio confronted in Medavoy’s second full year at the helm. Though Carolco’s “Universal Soldier” grossed a solid $ 35.9 million at the box office, it was TriStar’s only release in the summer–when roughly 40% of all box office receipts are tallied.
In addition, “Universal Soldier” paled in comparison to the Carolco product that TriStar distributed in the two previous summers–“Total Recall” and “Terminator 2: Judgment Day.”
An optimistic Medavoy said 1992 will prove to be a good year for the studio inthat “building blocks were set” for the future. He said “the most dramatic changes at the studio were the production deals” signed late in the year, as TriStar attempted to wean itself away from a dependence on Carolco product.
Two building blocks were put in place in December, when TriStar anointed Scott Rudin with a top-of-the-lot producer’s package and entered into a four-year production/distribution pact with Daniel Melnick’s IndieProd Co. Also, the studio expanded its talent base with term deals for “Straight Out of Brooklyn” director Matty Rich and Robin Williams’ Blue Wolf Prods. Not all of TriStar’s troubles were external. In February, TriStar axed seven production executives and three story staffers in one of the single largest executive purges of the year.
TriStar broke out of the doldrums late in the year, as Medavoy, prez Marc Platt and production prexy Stacey Lassally became Hollywood’s most aggressive buyers.
But the production activity did not mask TriStar’s troubles at the B.O. In August, as it prepared to release “Husbands and Wives,” the studio landed in the middle of director Woody Allen’s high-profile custody battle with Mia Farrow. Though the headlines created high awareness for the movie, they did not deliver audiences.
Of TriStar’s other ’92 releases, “Thunderheart” and “City of Joy” were modest performers, while “Wind” was a disaster. Its pickup of “Candyman” from Columbia TriStar Home Video proved a success, while “Chaplin” has been quiet in an Oscar qualification run.
Despite its dearth of product, the studio held back three releases during the year: “Wilder Napalm,””Sniper” and “Mr. Jones.” The three pix latch onto TriStar’s 1993 release schedule, which currently stands at 11 pix.
While TriStar struggled for box office in 1992, the toughest obstacle it faced was also the most unrelenting. Many in Hollywood were convinced that Medavoy would bear the brunt of the studio’s 1992 performance and be ousted from the chairman’s suite. Because of his close ties to Democratic Party politics, the rumors centered on the possibility of Medavoy landing in the Clinton Administration.
But when 1992 ended, Medavoy had survived his 18th year as a studio executive.
But while New Line couldn’t rely on its old franchises, it’s is trying to develop new ones, including the Incredible Crash Dummies — stars of the public service announcements used to promote seat belt use and auto safety. New Line also said it was developing a movie for radio shock jock Howard Stern, “The Adventures of Fart Man.”
The reports of Freddy Krueger’s death are greatly exaggerated, as New Line said it would indeed be bringing Krueger back for another appearance, possibly this year.
In the executive suites there were major changes, as Michael De Luca was named exec VP and chief operating officer of New Line Prods., taking over operational control from prexy Sara Risher, who, at the same time, was promoted to chairman of the unit.
De Luca’s promotion was seen as important, coming at a time when New Line was gearing up one of the most aggressive development and production slates in the company’s 25-year history. Among the projects De Luca is credited with bringing to the studio are “National Lampoon’s Loaded Weapon 1,” the Howard Stern project , director George Romero’s “Unholy Fire” and the Incredible Crash Dummies project.
In her new position, Risher will point the company in new directions, including identifying market trends, new movie genres and potential franchise properties.
New Line has high hopes for two franchise properties they will try to establish in 1993: “National Lampoon’s Loaded Weapon 1” and the actioner “Excessive Force,” which written by and starring martial arts expert Thomas Ian Griffith.
NL is counting heavily on franchises “Teenage Mutant Ninja Turtles III” and “Friday the 13th: Jason Goes to Hell,” both of which will be released in 1993.
Another notable New Line executive change in 1992 was the resignation of Sandra Ruch from her post as the company’s president of marketing.
In a sense, 1992 was deja vu for MGM.
Like 1991, the year closedwith French lender and owner Credit Lyonnais duking it out in court with a former MGM owner while the studio’s market share was stalled in last place due to underperforming films.
At the end of 1991, MGM was caught in the middle of a fight between CL and Italian financier Giancarlo Parretti, who used bank financing for his highly leveraged 1990 buyout of the studio that ended with Parretti being booted and the bank taking over operations of the Lion’s den.
In 1992, it was former MGM majority shareholder Kirk Kerkorian and his Tracinda Corp.–who sold the studio to Parretti–that Credit Lyonnais accused of fraud related to the sale.
As CL began the court battle with Kerkorian to try and win back the bulk of the money it shelled out in loans to help Parretti pull off the merger, it also initiated a strategy to heal the studio’s crippled production output.
Late last month, CL agreed to allow MGM to put up $ 60 million in cash and stock in Carolco Pictures–another troubled CL-backed entity–for a 15% stake in the indie plus rights to distribute Carolco’s pictures when Carolco’s distribution pact with TriStar Pictures expires in 1994.
That feeds more product through MGM’s relatively dry distribution pipeline.
Last year, that pipeline was fueled with only eight pictures (nine including Turner’s rerelease of “Casablanca”).
All grossly underperformed at the box office, despite favorable reviews for such pix as “The Cutting Edge,””The Lover” and “Of Mice and Men,” which drew rave reviews at the Cannes Film Festival.
MGM’s cumulative domestic B.O. for the year was $ 58.2 million.
MGM’s biggest embarrassment was the marketing disaster of “Diggstown.” The film was generally considered so poorly handled that it prompted a major shakeup in the marketing department with the exit of department head Greg Morrison and the arrival of former Orion Pictures marketing exec Tami Masuda.
Of the new talent in the marketing division, studio chief Alan Ladd Jr. said, “I think we are pretty happy with where it stands now.
“The attitude has certainly changed. Certainly people are very enthusiastic. Since we have reassessed our whole marketing division, I can’t see a lot of changes to come.”
The co-chairman and co-chief executive called “Diggstown” the “low point of ‘ 92. What happened with that film really devastated everybody,” he said.
“We all thought we had a runaway hit on our hands. And then everything fell apart.”
When “Diggstown” collapsed, it focused attention on MGM’s problems overall.
Some critics said the company became so gun-shy about negative publicity that it chose to postpone the release of “Rich in Love” until the first quarter of this year so it could revamp the marketing program and maneuver a better release date for the film, currently targeted for March 12.
“For the past two years, this company has been struggling with trying to rebound from the damage that happened under Parretti’s control,” Ladd said.
“It’s true ’92, like ’91, was not that satisfactory. But even this past year, talent and filmmakers were just really beginning to realize that the bank was not going to walk away from the company and let it collapse. The concern has always been, will Credit Lyonnais be behind this company?
“I can tell you that for ’93 we will be taking bigger risks. We will go for higher profile pictures with bigger talent. We have to be stronger,” Ladd said. “That is our goal.”
Right now, Ladd says MGM has a dozen projects on its slate, far fewer than any of the majors in Hollywood. “But we are in a rebuilding program. We want to build relationships with talent as well right now,” he added.
“We go into ’93 riding the high point of ’92: Giancarlo Parretti is finally out of our lives for good.”
By late May it appeared MGM was becoming stronger. At one point the studio considered making a bid for the bankrupt Orion. But that eventually gave way.
Like Orion, MGM was flooded with debt, although its condition has improved from the prior year.
In the first quarter, MGM limped along under a $ 54.6 million loss. Still, it was a dramatic improvement from ’91, when MGM was reporting a hefty $ 100.6 million loss for the comparable period.
And while the numbers are improving, CL continues to pump out about $ 1 million a day to keep the company running. Ladd and his production crew believe 1993 just could be the turning point.