It turns out Rupert Murdoch’s prediction at News Corp.’s annual general meeting last November that the “small and very interesting theme park” at Sydney’s Fox Studios Australia won’t be “a bonanza or set anything on fire” was on the mark.
News Corp.’s joint-venture partner in the complex, Lend Lease Development, has told the Australian Stock Exchange that each partner will need to invest up to A$20 million ($12.5 million) to upgrade and “round out” the backlot precinct. That area features movie-themed tours and shows and has been performing below expectations.
Lend Lease said it intends to write down by 10% its $142 million investment in the $284 million complex.
The complex, which bowed amid a blaze of publicity last November, has a retail area and busy soundstages, which have hosted such big productions as “The Matrix,” “Mission: Impossible 2” and “Moulin Rouge” and will host the next two “Star Wars” installments.
Although Mutual Film Co. has shed one of its foreign partners and recently saw the departure of longtime executive Michael Dahan for the dot-com world, partners Mark Gordon and Gary Levinsohn may be on the verge of seeing a renewed vision of their 3-year-old production, sales and financing company.
Where there were once four foreign partners, there are now three: France’s UGC-Ph is no longer part of the alliance, leaving Germany’s Tele-Munchen, the U.K.’s BBC and Japan’s Toho-Towa. Sources indicate, however, that Gordon and Levinsohn are on the verge of closing a major credit facility for the company.
While sources say the credit line will give the partners additional time to pay for Mutual product rather than owing upon delivery, it’s unclear whether the relationship will resolve what has been one of the major frustrations in the Mutual relationship.
When Levinsohn and Gordon formed the outfit in 1997, they changed the name of their company from Cloud 9 to Mutual to reflect the co-venture’s goal of allowing several investors to share the risk — and profit — of a project portfolio. However, the foreign partners have had to shoulder the financial burden stemming from a string of flops while studios cherry-picked “Saving Private Ryan” — handled by Mutual parent Paramount overseas — and the upcoming “The Patriot” starring Mel Gibson. Although that film will be distributed worldwide by Columbia, it was originally announced as part of Mutual’s international slate.
Instead, the partners saw pics like Par’s “A Simple Plan” — strong reviews, poor box office — and “Paulie: A Parrot’s Tale.” Distributed by DreamWorks, it didn’t fly.
In fall 1997, Universal made a deal with Mutual in which the studio laid off the foreign rights to five titles. While the Bruce Willis/Richard Gere thriller “The Jackal” was a strong performer, “Black Dog,” “Virus” and “Primary Colors” proved pricey failures, while “Age of Aquarius” starring Harrison Ford never materialized.
More recently, Mutual handled the foreign rights on U’s “Man in the Moon” — a ticket-buying disappointment — and “Isn’t She Great,” which proved to be a bomb. Meanwhile, Par’s critically acclaimed “Wonder Boys” also fell short at the box office.