Sid Sheinberg and Universal Pictures confirmed Tuesday that they have parted ways, ending their exclusive arrangement (Daily Variety, June 10). In addition, the joint venture agreement between MCA Records and the Track Factory (an affiliate of the Bubble Factory) is being terminated.
Rumors of the deal coming to an end had been circulating for more than two weeks.
The 2-year-old Bubble Factory was fully financed by Universal parent Seagram. It called for Universal to finance three to four films annually over five years. It also allowed for a number of “put” pictures, or projects the Sheinbergs could put into production without seeking studio approval.
Addressing that issue, Sheinberg called the deal “functionally too restricting.” He added, “When we realized that current Universal corporate management considered aspects of our arrangement regarding so-called ‘put’ pictures philosophically inconsistent with the way they wish to do business, we quickly resolved to seek a mutually beneficially new arrangement.”
The Bubble Factory, the company run by Sheinberg and his sons Jon and Bill, has not had a good track record at the box office.
For Universal, the company has so far produced “Flipper,” which grossed only $20 million domestically and $35 million worldwide; “McHale’s Navy,” which grossed only $4.4 million domestically; and “That Old Feeling” which grossed $16.4 million domestically. At Sony, the Bubble Factory produced “The Pest,” which grossed $3.6 million domestically.
When the Bubble Factory deal was announced in 1995, sources told Daily Variety, the deal included a performance provision that provided an out for the studio if the Bubble Factory failed to reach a certain performance level financially.
Sheinberg said, “It was inaccurate to say that we failed to meet financial performance.” In fact, Sheinberg is right. The provision has not yet kicked in. The next film out from the Bubble Factory is the Mara Wilson-Martin Short starrer “A Simple Wish,” which bows July 11 for Universal.
Sheinberg would not comment about the provision. “It’s none of your business if there is a performance clause in the contract,” he said. “I don’t have to tell you anything. You’re not my psychiatrist.”
The Bubble Factory has two other upcoming releases: the Tim Allen comedy “For Richer or Poorer,” which will debut at Christmas via Universal, and “Stinkers,” which Sony has scheduled for first quarter 1998.
“The previous arrangement with the Bubble Factory was mutually too restrictive and limiting to both parties,” Universal Studios president and chief operating officer Ron Meyer said in a prepared statement. “We wish Sid, Jon and Bill the very best in their future endeavors, and look forward to our ongoing collaboration with (our) upcoming films.”
Asked where the company will now get financing, Sheinberg said: “At this moment where it’s coming from is none of your business. We have the wherewithal through our company for financing.”
Sources noted Universal Pictures wrote a check to the Bubble Factory for the remainder of the deal, but it’s not clear how much money exchanged hands.
It’s also not clear if development or staff will be cut back as a result of the deal’s termination. Sheinberg said it was too early to tell. The company will continue to operate out of its Beverly Hills offices.
“We’re continuing our business. This Bubble has not burst,” said Sheinberg. “It simply decided that this company should be making movies for a variety of companies rather than one company. The company will now be in a nonexclusive mode.”
Sheinberg said both he and the studio were bound by a confidentiality agreement and could not comment on the exact arrangement.