Studios trapped atop $100 million tentpoles

LAS VEGAS — It started as an amiable ritual. Each year at the start of ShoWest, Jack Valenti would sit down at breakfast with a few reporters for a sort of state-of-the-union colloquy. The ever-voluble MPAA chief would present his association’s data on box office and production costs and would banter about the foibles of showbiz.

Last week the white-maned Valenti was on hand as always with his numbers, but the occasion seemed edgy rather than genial. The data he presented offered less a profile than a parody of the movie business. Indeed, at one point Valenti dispatched two aides to double-check his numbers because even he thought them to be surreal.

And here’s the magic number: $75.6 million. That’s what MPAA member companies now spend to produce and market a typical movie. This number represents a jump of 26.6% over 1996, the biggest year-to-year increase since the association started collecting data in 1980.

And if you break down the data still further, you find that the sharpest increase was in production costs, not in advertising. The cost of producing the typical movie vaulted by 34%, from $39.9 million to $53.4 million, a startling annual jump. By comparison, average marketing costs rose 12.2%, to $22.2 million.

Ever the loyal industry emissary, Valenti sought to soften the impact by citing that worldwide box office also was on the rise. It jumped 9% last year to total $6.3 billion. And it looks like the industry goal of reaching 1.5 billion admissions by 2000 will be achieved ahead of schedule.

ALL THIS SOUNDS IMPRESSIVE enough, but still — $75.6 million! Why would the cost of producing a movie increase by 34% in just one year?

This question seems all the more pertinent in view of the following:

– The economy as a whole shows no signs of inflation — most industries outside of Hollywood have succeeded in imposing effective cost controls.

– The studios keep telling us that the movie business is no longer agent-controlled, that in post-Ovitzian Hollywood the balance of power has shifted back to the production entities.

– The majors are making fewer movies (MPAA companies released 197 titles last year, down 18 from the year before), and an increasing number of projects are co-financed by two studios, theoretically placing them in a better bargaining position.

– Technology supposedly is bringing down production costs, thanks to special effects, computerized editing and so forth.

So what’s gone wrong? Have the studios fatalistically decided there’s no way of combating their own private inflationary cycle?

The answer: Possibly yes. But anyone wandering around ShoWest last week could detect some hints of change. One clue lay not in who was there, but in who wasn’t. Several major studios were no-shows — companies like Fox and Paramount and Warners and Disney (because they put on no formal presentations, their presence was more symbolic than real).

Also not there: A Tom Cruise or a John Travolta or a Mel Gibson. The $20 million star elite were nowhere to be seen.

The company that offered the most lavish presentation was Sony, eager to defend its 1997 title as the top-grossing studio. In mounting its dog-and-pony show for an estimated 3,000 exhibitors, Sony pulled out all the stops — a comedy turn by Leslie Nielsen, a satiric song from Robert Goulet, even a feigned economics lecture from Ben Stein.

But there was little doubt as to the star Sony wanted to focus on — its well-traveled reptile “Godzilla,” stomping his way through downtown New York while his supporting cast emitted the appropriate yelps and screams.

Once the “Godzilla” trailer had given way to Sony’s post-reptilian slate, the audience quickly realized a new focus: the Clearasil crowd.

Without making much noise about it, John Calley and his supposedly elitist team have been indulging themselves in a surprising number of teen comedies and genre thrillers — movies that represent modest production investments. Those few projects on its show reel that suggested a more serious intent, like “Apt Pupil” or “Les Miserables,” were pickups from companies such as Phoenix or Mandalay.

ALL OF WHICH REINFORCED the suspicion that the movie industry is increasingly becoming truly bifurcated. There are the “Titanics” and “Godzillas” — the $100 million and up go-for-broke tentpole pictures. And there’s the teenybopper “Scream” and sex genre fare at the low end. Apparently, it will be left for the independents to fill in the middle. The summer of ’98, when the studios unfurl a surprising number of “counter-programming” movies in the $60 million-to-$70 million range, may mark the last gasp of this category.

If this be the case, Jack Valenti will clearly have to rethink his routine at his ShoWest breakfasts. Two sets of data will be presented: The average cost of the $100 million tentpolers, and the data for the Clearasil projects. And just to focus things still further, it might be useful to add a third category — namely Jim Cameron’s next project, whether it be “Spider-Man” at a mere $350 million or the project everyone wants him to do, a remake of “Gone With the Wind” at a mere $600 million.

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