Split focus between clients and studios can put crimp in shingle-spawned projects

A few years ago, Brillstein Grey was making TV series deals and Brad Grey was forming a first-dollar gross film company with clients Brad Pitt and Jennifer Aniston; Mike Ovitz was pouring millions into production and chasing CAA clients.

It seemed the sky was the limit for management-production companies, and agents and guild members fretted at their growing power, with dire predictions of what it meant for Hollywood.

A few years later, the alarm bells have quieted and the rhetoric has softened.

Producer-managers are behind such films as “Saw 2″ and “The Exorcism of Emily Rose” and TV series like “Two and a Half Men.” The good news is they haven’t destroyed the town, they’re getting plenty of jobs for their clients, and many of their works have made big profits — even if they haven’t been artistic triumphs or big films.

But there are still concerns. They’re still unregulated, which worries some. If they’re keeping an eye on their clients, who’s repping the broader interests of the project? Are the managers-producers compromised?: They’re trying to get the best for their clients and run a management firm, but movies and TV series need producers whose top priority is the show.

In their heyday, manager-producers were powerhouses who sometimes overshadowed their clients.

After Grey traded his company for the chairmanship of Paramount, and Ovitz’s Artists Management Group crashed and burned, megalomania was replaced by more modest ambitions and a desire by management companies to create projects for their clients with midbudget fare.

The strategy has led to films such as the Benderspink-generated “A History of Violence” and “Monster-In-Law”; the Firm Films-hatched hit “The Exorcism of Emily Rose”; and “Saw II,” the horror sequel spawned by Evolution Entertainment.

Also trying this approach are Gold-Miller’s Eric Gold and Jimmy Miller with a comedy slate at Sony, plus 3 Arts, Management 360, Anonymous Content, Brillstein-Grey, Industry Entertainment Partners, Principato Young and Key Creatives all ramping up film product.

Each company feels it can service clients by creating project opportunities for them, but producing is a growing part of a management company’s bottom line.

“If as a manager you put together a project for a writer who gets $1 million to write a script, you’ll get a $100,000 commission,” says one veteran manager-producer. “But if you generate the idea and help put it together, you’re looking at a producing fee of $1 million.”

Mark Burg and Oren Koules, who formed Evolution Entertainment six years ago, have done much better than that. After signing Charlie Sheen, helping him rehabilitate his image and setting him up with show creator Chuck Lorre, they are exec producers of TV’s top-rated sitcom and future syndication cash cow “Two and a Half Men.”

On the feature side, they self-financed the $1.2 million budget of “Saw” after their production head Gregg Hoffman got the script by Aussie unknowns James Wan and Leigh Whannel and a sample scene from the movie. The film grossed 100 times its budget worldwide.

Burg and Koules own the first two films as well as a third in the offing, and they may already have earned more than $30 million from theatrical and DVD receipts — the kind of windfall Ovitz was looking for when he went the manager route.

Burg and Koules say they’ll use their proceeds to finance more genre films, and to seed TV series and larger-budget films they’ll set at studios. All productions will provide work for their management clients.

That’s the mantra of these new-style manager-producers: Keep your talent working happily and you’ll reap the rewards.

“When we produced ‘John Q,’ we had 13 clients in the movie, and on ‘Saw,’ seven of the 11 speaking parts were Evolution clients” says Koules. “When clients put their careers in our hands and pay us large commissions, why wouldn’t we put them into films we put together and particularly the ones we finance?”

But can a manager-producer serve two masters? What happens when a client’s needs conflict with the needs of the film itself?

The emergence of managers raised the specter of conflicts of interest right from the start, though managers point to similar dilemmas faced by packaging agencies or lawyers who rep multiple participants in a deal, often including the studio execs making it.

Grey’s envelope-pushing style at Brillstein-Grey put him at the center of the biggest example of conflict when former client Garry Shandling charged that his longtime manager had used him as currency to make production deals at ABC and MCA/Universal. Grey and Shandling eventually settled the matter.

Manager-producers face a different conflict today. They are eager to dispel the stigma of freeloading reps who get credit by leveraging the participation of a client who’s only too happy to see the rep’s commission come from studio coffers and not their wallets.

Bernie Brillstein, who first began taking producer credits when he repped John Belushi and studios wanted Brillstein on the scene because he was the only one his client would listen to, thinks the stereotype is unfair.

Says Brillstein: “If you are good at what you do, you are constantly the middleman, the one who subjugates ego to get things done.

“I first did this when Belushi asked me to exec produce ‘The Blues Brothers,’ right when he became a star and felt he needed protection from the studio and the director.”

Managers say there’s no such thing as a free lunch. A manager who comes aboard a project with their client isn’t just carrying a title.

“Believe me, there is a whole lot more work involved in producing a movie than cashing a commission check,” says Erwin Stoff of 3 Arts, who often produces films toplined by client Keanu Reeves. “In fact, if the first thing they say to me is, ‘I’m doing this, I’d like your client to be in it and of course I’ll bring you on as a producer,’ I run in the other direction.”

But where does a producer-manager’s loyalty fall when there’s a conflict between a client’s needs and project’s needs?

One studio vet who has sat across the bargaining table from managers with producing aspirations says it’s not hard separating real producers from conflicted pretenders.

“Those people are noisy and not helpful,” says the exec. “But that isn’t the case with Eric (Gold) and Jimmy (Miller), or guys like Chuck Roven or Peter Guber, who are adding intellectual capital.

“You have to look beyond titles: Are they optioning material and generating ideas and scripts? Do they have development staffs? Are they helping you find tax breaks or international distributors for a piece of the budget? If they do some of these things, they have gone beyond representing the interests of their clients, and having them as producers is a good investment for a studio.”

Producers Guild exec director Vance Van Petten believes the org has helped weed out glommers by routinely auditing all hyphenates that petition for credit, and making it clear to managers they must satisfy half of the 40 producing tasks outlined by the PGA.

“If you are going to put your name on a film or television series and not do the work, the guild will embarrass you,” Van Petten warns. “If that production gets creative acknowledgement by any academy, we will out you.”

But, Van Petten notes, many managers today are full-fledged producers, with responsibilities that overlap their management roles. The balancing act, however, can be delicate.

Gold says a studio must know going in that the manager-producer’s primary allegiance, in his shingle’s case, will always be to Gold-Miller clients. Now, Gold and Miller — whose stable of comedy writers, directors and stars made them behind-the-scenes influences on pics like “The 40-Year-Old Virgin” and “The Wedding Crashers” — hope to put their comedy savvy to good use as first-dollar gross producers at Sony. The duo is producing the untitled NASCAR vehicle for Will Ferrell and “Outsourced,” a Columbia comedy that might mark a reteaming of “Wedding Crashers” stars Vince
Vaughn and Owen Wilson.

But Anonymous Content’s Steve Golin, a producing vet who helped transition such directors from his commercials division as David Fincher, Gore Verbinski and Mark Romanek, says the practical realities of production don’t always allow you to take a client’s side. Shrapnel is unavoidable, for instance, if a director wants to replace a management company client. Golin says the best strategy is to explain the rough-and-tumble realities of film production to clients before shooting starts.

“When I’m going to produce a movie, I’m very frank with our clients that I’ll be doing what is in the best interest of that movie,” says Golin, who’s now producing “Babel,” the Alejandro Gonzalez Inarritu-directed drama that stars Brad Pitt. “I’m loyal and fair, but the fact of the matter is, either you are a producer or you’re not.”

For Gavin Polone, that conflict proved too disruptive.

He chose producing and shuttered a successful management company three years ago. He reps only Conan O’Brien now, because there is no conflict with the films and TV he produces through his Pariah shingle. “I had to make a hard choice,” Polone says. “If people look at you as a manager, they won’t take you seriously as a producer.”

Chris Bender, who founded Benderspink with partner JC Spink after watching client Adam Herz’s script about horny teens become “American Pie,” a moneymaker for everyone but himself, says the loyalty issue was the hardest part of his learning curve as a producer.

“I didn’t understand it until I was making a film with a first-time director and writer, then discovered the reality of (simultaneously) working for a studio and a client,” Bender says. “When things get ugly, you realize you can’t do both. Choose and be upfront about it, or you’ll do a muddied job for both parties.”

As for the original managers-turned-producers, they’re still in the game — albeit in different incarnations.

After Grey cashed out of Brillstein-Grey six months ago, speculation is high that new heads Cynthia Pett-Dante and Jon Liebman will form a new film company, after Plan B was signed over to Grey’s partner, Pitt. But B-G is not in a hurry, because the firm now commissions the producing fees of each Plan B project, and managers there have set up Plan B projects like an adaptation of the James Frey memoir “A Million Little Pieces.”

Ovitz’s former AMG partners Julie and Rick Yorn have teamed with Jeff Kwatinetz at the Firm. As an AMG manager, Julie Yorn watched as Ovitz put together big production divisions that ultimately collapsed under the weight of their overhead. Yorn’s costs now are minuscule by comparison, and she is content to take it slowly.

“If we can make more movies like ‘The Exorcism of Emily Rose’ that generate some revenue and allow an opportunity for clients to have an inhouse development and production arm to service their needs, that will be fine for now,” she says.

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