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Dream machine gets a facelift

Studio reawakens to a Geffen-ing roar

Steven Spielberg is directing two films this year. Jeffrey Katzenberg is running the burgeoning animation empire in Glendale.

So who’s running the live-action business at DreamWorks? It turns out to be the music guy, David Geffen. The one-time record mogul and star-maker, until now the least visible member of the DreamWorks troika, has assumed the task of turning around the division after its 18-month box- office slump.

At age 11, DreamWorks is in the midst of an adolescent identity crisis. When the company was formed in 1994, its principals grandiosely announced the studio was going to be different, with a distinct personality — i.e., not a popcorn machine.

Now, DreamWorks is in business with Michael Bay, one of the most aggressively commercial directors around, on not one but two projects: “The Island,” which hits theaters July 22, and “Transformers,” based on the 1980s toys. And the studio is revving up plans for a bigscreen version of “Baywatch.”

So a decade later, filmmakers and agents are still wondering: What exactly is the DreamWorks mandate?

The identity crisis extends even within the company, as various execs debate approaches for the planned rejuvenation.

After back-to-back Oscar wins for “American Beauty” and “Gladiator,” DreamWorks’ live-action division hit a major speed bump for most of 2003 and 2004, turning out titles like “Envy” and “Surviving Christmas.”

In addition, talent was getting mixed messages from the studio, thanks to creative dissonance between production toppers Walter Parkes and Laurie MacDonald, and production prexy Michael De Luca.

Last fall, there were murmurs as to whether the studio could survive without the support of its toon wing, which was cranking out mega-hits like “Shrek.”

With the animation division spun off, however, the live-action wing is undergoing a rebirth and is rethinking its old formulas.

While not completely abandoning its tradition of small-scale, quirky pics, DreamWorks is moving more aggressively in the direction of tentpoles, an area that it’s generally avoided.

Geffen is the man in charge. Besides having a final say in greenlight decisions, he functions as the overseer of an idiosyncratic mix of personalities and business philosophies trying to mesh.

Such as De Luca successor Adam Goodman and former Miramax macher Rick Sands, who became chief operating officer earlier this year.

The duo has been charged with broadening the studio’s slate, but the question is, how broad?

With big ideas and high hopes to expand the release slate beyond eight pics a year, Sands is bringing his cowboyish Miramax style to a studio that’s not used to thinking that way.

Goodman who came of age within the DreamWorks corporate culture, is more cautious, saying there’s no set number, that the studio will concentrate on quality, not quantity.

The notion of putting more energy into tentpoles has taken some adjustment at the company. Sands recalls that at a meeting with non-production senior execs, concern was raised over some of the studio’s upcoming projects.

“It’s just a matter of explaining that we’re maintaining integrity and profitability,” he says. “There’s no resistance, but there was a little surprise at first with some of these movies.”

This month, DreamWorks opens its $130 million summer actioner “The Island.” The fact that Bay, long a staple at Disney for producer Jerry Bruckheimer, has become a regular at DreamWorks is a rather explosive development, and a sign that DreamWorks — which made its name on prestige, Oscar-geared pics like “Saving Private Ryan” — is trying hard to embrace the mainstream.

“We still want to make important movies, but I do believe the palette is broadening,” Sands says. “That’s not to say we’re going to make the next slasher movie, but we are broadening our appetite for what we’re looking for creatively.”

Along those same lines, DreamWorks is making a big investment in “Baywatch,” the guilty-pleasure TV series popularized by Pamela Anderson-shaped Speedos. Earlier this year, DreamWorks paid $1.25 million for the film rights to the skein.

The fiscal verdict is still out on the new DreamWorks. Earlier this year, “The Ring Two” racked up a solid $75 million in the U.S., but that’s hardly the $130 million the original film made in 2002. And while “War of the Worlds” is a huge hit, it’s a co-production with Paramount. Spielberg’s other film, an untitled drama about the 1972 Munich Olympics, is a co-production with Universal. Most of the studio’s biggest investments this year haven’t yet been released.

Box office aside, however, DreamWorks has a few things in its favor financially. The company no longer covers animation’s overhead (granted, it no longer reaps its riches, either) and it receives a distribution fee from the toon company.

Physically, too, the studio is more consolidated. Since the IPO, the studio’s business affairs, production and post-production divisions are now housed at Amblin, rather than across town on animation’s Glendale campus.

The studio is anxious to avoid some of its past mistakes, like putting the 2004 Ben Stiller comedy “Dodgeball” into turnaround. Pic went onto gross $114 million for Fox.

“That was the kind of movie we felt we could deliver to them,” Stiller says. “When it slipped through their fingers, I think it sort of woke them up as to what opportunities they had. And they were very sure to take that and say, ‘We’re not going to miss that again.’ ”

DreamWorks has since lavishly re-upped its deal with Stiller’s shingle, Red Hour, as part of a campaign to shore up its commercial prospects.

Most of the studio’s 2005 slate was whipped up within the last year. “War of the Worlds” was announced just a year ago and blasted into theaters over the July Fourth weekend, grossing $215 million worldwide over the long weekend.

When “The Island” nearly fell apart over budget issues, Warners came onboard to co-finance the pic and handle overseas rights.

The film’s high-concept plot — a futuristic thriller in which human clones are harvested for their internal organs — and unproven stars on a film this scale (Scarlett Johansson and Ewan McGregor) make “Island” one of DreamWorks’ biggest gambles to date.

And at the privately owned DreamWorks, lost bets hurt bad — much more than at the vertically integrated majors, where other divisions can help offset a loss.

Bay describes DreamWorks as a “mom-and-pop shop” compared with other studios.

“It has its advantages and disadvantages, like every studio,” he says. “The advantage is, you get direct access to the studio; it’s a much more family-oriented place. The disadvantage is trying to convince them of the tentpole thing. They’re not used to it. It’s like they want it, but it’s just a touch foreign for them.”

Goodman, an Xbox Live enthusiast whose film sensibility was shaped as an assistant to John Hughes, says attracting — and keeping — talent like Bay is a priority for him and his colleagues (most of whom are also young and male).

Not to say that DreamWorks is only about comedies and movies in which things blow up. The studio’s fall slate also includes the Mark Waters-directed “Just Like Heaven,” starring Reese Witherspoon and Mark Ruffalo, and “Dreamer,” a father-daughter story with Kurt Russell and Dakota Fanning.

The company nabbed domestic rights to Woody Allen’s Cannes darling “Match Point,” and is lining up Go Fish releases such as “The Prize Winner of Defiance, Ohio,” based on the novel by Terry Ryan and starring Julianne Moore, and “Last Kiss,” a Lakeshore Entertainment co-production directed by Tony Goldwyn and starring Zach Braff.

Almost all those films were put together in the first several months of Goodman’s tenure, which began in February 2004. When he landed the job, DreamWorks’ production pipeline had practically ground to a halt.

Geffen’s move was mandated at the time of the IPO by DreamWorks’ financial backers, who provide the studio with a $700 million revolving credit fund — a sum that nears Universal’s ann
ual production budget.

Geffen’s contract is for three years and is salary-free. (None of the DreamWorks partners take a salary.) Another mandate was that Katzenberg could only devote 10% of his time to DreamWorks live-action projects.

Geffen — who wouldn’t comment for this story — is now physically on the lot, unlike during the studio’s earlier days; but he retains his role as the guy who swoops in to nail the deal or fix whatever’s broke. At the same time, he’s been hands-on with “Dreamgirls,” a Bill Condon-directed adaptation of the musical (which Geffen produced), starring Beyonce, Jamie Foxx and Eddie Murphy.

Geffen’s management style is described as giving those under him a lot of rope — to run with or hang themselves, whatever the case may be.

“David is always there for advice and always there to help get a deal closed or create an opportunity for something, which is really nice,” Goodman says. “To have that in your corner makes you feel really, really empowered.”

Goodman adds Spielberg and Katzenberg remain creative forces at DreamWorks. Bay says it was Spielberg who called him about directing “Island,” and offered advice during production.

“I’m a director, I don’t want people bugging me, but at key moments, he’s given me some good ideas,” Bay says. “It’s pretty funny — he was watching all my dailies. Spielberg watching your dailies!”

With Parkes and MacDonald, now full-time producers based in Santa Monica, Goodman has more oversight of production. Meanwhile, the husband-wife team remain creative consultants to the studio and continue to supply DreamWorks with pics, such as “The Kiterunner,” based on the novel by Khaled Hosseini, which they’re producing. (Parkes and MacDonald were also producers on “The Island.”)

Fewer cooks in the kitchen has made the studio more user-friendly for agents. “It’s an easier place to do business, because you know who to call,” says one agent who wished to remain anonymous in order to protect his relationship with DreamWorks. “Before, it was like everyone seemed powerless … Adam really does have the power — he goes right to David and Steven. There’s a feeling that you can get more business done.”

Goodman’s close relationship with his bosses, and the fact that he has spent many years at DreamWorks — known for its clubby, insider culture — give him an advantage that other production prexies at the studio lacked.

Sands, meanwhile, is the latest outsider to infiltrate the lot. Although he comes from Miramax, another insular company known for its quirky culture, the two companies’ styles are not necessarily kindred.

While DreamWorks has been adjusting to Sands’ high-octane personality, “I’ve had to adjust to the pace,” Sands says. “There was quite the borderline-insatiable appetite at Miramax. We’re certainly more selective at DreamWorks, in how we create, acquire … it’s just a different process.”

Sands and Goodman work as a team, with Sands charged with Katzenberg’s former administrative duties and getting Go Fish up and running. He’s also been looking outside for financing opportunities and had his eye out for acquisitions, such as “Match Point” and Tom Tykwer’s “Perfume.”

Six months in, the partnership seems to be working, despite the fact that the two men have radically different modi operandi. Sands is known for being aggressively decisive, making deals and letting people in on them afterward.

Goodman works more carefully. Even discussing DreamWorks’ slate, the prexy is uncomfortable settling on a definite number of films, insisting there’s no mandate.

“I don’t feel like I come to work and everyone’s saying to me, ‘Adam, you have to have eight movies next year.’ We realize it’s just better to make a couple of great movies than it is to make a lot of OK movies.”

Goodman probably understands that until there are substantial hits to crow about, it’s better not to raise expectations.

However, with all the internal maneuvering that’s been going on at the studio lately, he should consider them raised.

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