In a surprise move, Castle Rock Entertainment decided to renew its theatrical-movie output deal with the Showtime Networks for as many as 50 pictures through the end of 1999. Sources say Showtime will pony up about $ 240 million over the six-year life of the contract.The paycable industry had speculated that either Tele-Com-munications Inc.’s Encore minipay network or Time Warner’s HBO would end up with the Castle Rock movies. That speculation arose because of the changed situation at Castle Rock, now owned by Turner Broadcasting System. TCI has a 23.3% stake in Turner, and Time Warner’s stake is at 18.8%. Greg Paul, executive VP of Castle Rock, says that he pitched the movies to “all three pay-TV companies” but that “the deal with Showtime was made at arm’s length.” “We wanted the pictures because of Castle Rock’s exceptional track record,” says Matt Blank, president and chief operating officer of Showtime Networks, citing such winners from the current Castle Rock exclusive deal as “A Few Good Men,””City Slickers” and “When Harry Met Sally.” Other sources say Showtime was aggressive in negotiating the Castle Rock deal because it will lose its biggest source of product, the movies from Disney’s Touchstone and Hollywood Pictures, early in 1997 when Encore takes over the output as part of a $ 1 billion deal it struck with Disney last October. Showtime will also lose New Line later this year and Imagine Entertainment next year. Castle Rock joins the following companies with exclusive Showtime deals: TriStar Pictures (through 1999), MGM/UA (through 2002) and Polygram (through 1997). And now that Showtime’s parent company Viacom has bought Paramount, Blank says the Paramount output will shift over to Showtime when the studio’s current deal with HBO runs out in 1997. Paul says even though Castle Rock produces only about five pictures a year right now, the infusion of cash from Turner will allow it to double that yearly total by the end of the decade. So between now and the end of 1999 Castle Rock could end up supplying close to the 50 titles the agreement calls for. The deal, like all of the major studio contracts with paycable networks, ties Showtime’s license fee to a fixed percentage of the dollar rentals each Castle Rock movie delivers to Columbia, which has exclusive theatrical distribution rights to the company’s pictures through the end of 1997. Sources say that, based on past track records, the pay-TV rights to the Castle Rock movies should cost Showtime somewhere in the $ 4.8 million-a-title range. If one or more Castle Rock pictures become a blockbuster, a clause in the contract says that Showtime will never have to shell out more than $ 12 million for any individual title.
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