Leslie Moonves as Harvey Weinstein?
It could happen, as the CBS topper Wednesday laid out a plan for his company to get into the midrange film biz.
During a Q&A session at a lunch confab during a PricewaterhouseCoopers media confab in Gotham, Moonves described a plan under which his company would invest in, and possibly produce, six to eight pictures annually in what he said would be the $20 million-$50 million range.
“As long as we’re smart, and we don’t look to do ‘Superman’ or $125 million movies,” Moonves said, the plan could work. “When you look at the Academy Award nominees from last year — be it ‘Capote,’ ‘Crash,’ ‘Good Night, and Good Luck,’ or ‘Brokeback Mountain’ — they all fit into that range, and we think we can make a real business of it using our assets.”
According to one version of the plan, the company would not get involved in distribution, but instead would put up the money for a production outfit to make the pics — or even produce the pics themselves with the help of private equity money. A studio would then distribute.
CBS’ money would come primarily from making one-stop-shop deals with the studio under which CBS would pay for rights to air or sell the pic on its various platforms such as Showtime, the Eye and international television. In exchange, CBS would receive profit participation in the film.
“We literally can get into the movie business risk-free,” Moonves said, because the company’s nets need to buy films for broadcast purposes anyway.
Moonves cited a call from Harvey Weinstein after the Viacom split in which the Gotham movie mogul told Moonves that a pay-television output deal was key to a profitable studio.
By offering deals early in the development process, CBS would produce a carrot other companies couldn’t: guaranteed play on a lot of platforms.
Besides the appeal of getting into theatrical, the business would solve the problem for Moonves of output deals on Showtime.
Deals with Lionsgate, Paramount and MGM are all due to expire in the near future. Moonves has been among the most vocal members of the chorus arguing that the cost of these pacts needs to be reduced in the iTunes age.
Company could also market films using CBS Outdoor, the advertising juggernaut it controls.
In making the film-biz argument, Moonves invoked his own experience.
“I come from the world of filmed entertainment,” he said, citing his past at Warner Bros. Television. “It’s a lot closer to have done ‘ER’ and ‘CSI’ and ‘Friends’ to (making) movies than some of the other companies that are out there. We know how to do this.”
CBS topper has dropped hints before about getting into the film biz, repeating keywords like “fun” and “discipline” on several occasions. But Tuesday’s talk was the most explicit outline of how the company would go about it.
Yet for all the specifics, the feeling is that Moonves is floating a trial balloon to Wall Street as much as engineering a strategy. His entree could take the current shape, a very different shape — including a straight-up acquisition of Lionsgate — or none at all.
Exec left himself a lot of wiggle room. “We are exploring,” he said.
A Moonves film foray would put his company in competition with its former sister company Viacom, which owns Paramount.
Moonves’ plan got high marks for its creativity, but movie-sales experts questioned why a studio would want to give up an ownership stake in a picture for what amounted to a set of traditional television output deals. They also noted it could be hard to team up this way with studio pics, since many of them were already tied up in existing deals.
The greatest obstacle would likely be Wall Street. CBS’ stock actually inched up about 1% after Moonves made the lunchtime announcement. Despite the influx of private capital into Hollywood, in the current climate of Wall Street, investors in public companies dislike the film business because of a perceived lack of financial stability. Instead they prefer content that can be easily and profitably syndicated, such as libraries.
And selling the film business to the Street could be especially tricky for CBS. “The kind of investor CBS is courting is a value-investor,” said one analyst. “And that investor hates the film business because it’s so unpredictable and there’s so little upside.”
And investors, who seemed to be coming around on Redstone’s breakup logic that large was no longer in charge, could be asking another question: Why is small suddenly not the belle of the ball.
“Isn’t an empire what the whole breakup was trying to avoid?” asked the analyst.