Production planned for spring 2002

Late entry Warner Bros. has beaten out Paramount, DreamWorks and Dimension Films for the domestic distribution rights to “Terminator 3: The Rise of the Machines.”

Intermedia-financed film will have Arnold Schwarzenegger reprising his cyborg role for $30 million, Jonathan Mostow (“U-571″) directing him and a budget of $170 million.

The auction was extraordinary in that four studios were willing to meet the basic asking price of $50 million against 50% of the gross receipts. WB won out by pitching two issues: The success of “Harry Potter,” the studio argued, demonstrated its ability to leverage the full range of assets of the AOL Time Warner empire; secondly, the studio’s muscle with exhibitors would guarantee “T3″ a dominant hold on theaters.

Warners also controls Schwarzenegger’s upcoming “Collateral Damage,” which is slated to open Feb. 8 after being moved off its original date in the light of the Sept. 11 tragedies.

WB plans to open “Matrix 2″ on Memorial Day of 2003, to be now followed up by “T3″ on July 4 weekend, then followed by Matrix 3″ in November. “Harry Potter” pics are tentatively planned for 2002 and 2004.

“It’s hard to remember a situation in which a studio had a stronger position in the exhibition community,” crowed one top Warners exec.

Principal photography is set for April, with a summer 2003 release.

Flush with the success of “Harry Potter and the Sorcerer’s Stone” and “Ocean’s Eleven,” WB was a late combatant in a week-long “T3″ auction run by Intermedia and C-2 partners Mario Kassar and Andy Vajna, who will produce with Joel Michaels and Hal Lieberman. WB will also have first refusal rights to a fourth “Terminator” installment.

The absence of franchise director James Cameron appears to have been offset by the addition of Mostow, a director who seems ready to step up to franchise fare. The script was originated by Tedi Serafian and redone by John Brancato and Michael Ferris. “T3″ picks up the story a decade after the sequel, when a twentysomething John Connor reteams with his cyborg protector to battle the TX, an advance model terminatrix.

While Schwarzenegger is back, the Connor role originated by Edward Furlong is expected to be recast.

The film initially drew bids from Universal, Disney (through Dimension), DreamWorks and Paramount. The latter two battled well into the weekend, with WB entering the fray late last week.

A strong U.S. showing is vital to Intermedia, whose partners Moritz Borman, Nigel Sinclair and Guy East are taking their greatest gamble by ponying up most of the money for a film whose Japanese and German distribution rights are already spoken for. Toho-Towa bought Japanese rights years ago from Kassar and Vajna, while VCL bought German rights.

Those deals, which preceded Intermedia’s involvement, helped Kassar and Vajna keep the project afloat after they paid $8 million to salvage the property from the Carolco bankruptcy auction as well as a comparable amount to Gale Anne Hurd. She produced and co-wrote the original and was assigned the rights for $1 by Cameron, with the promise that she would not allow a financier to replace him — a director whose credits at the time were “Piranha Part Two” and “The Spawning.”

Cameron originally intended to direct Schwarzenegger in “T3,” but dropped out along with Fox.

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