Malone makes major play for content creation

NEW YORK — John Malone has started the push to turn his Starz pay TV operation into a full-fledged media company, with Chris McGurk in line to run the film side.

The newly named Starz Media plans to produce up to 12 original movies per year and distribute them on all platforms: theatrical, DVD, PPV, broadband, premium and basic cable, broadcast and syndication.

Company also plans to create, produce and distribute original television shows.

Moves come as a result of Starz closing its deal to acquire indie production company IDT Entertainment, owner of several animation studios and producer of the popular “Masters of Horror” series.

McGurk was brought on as a consultant to build a theatrical distribution and live-action production unit back in April.

The filmmaking aspect of Starz’s plans has stirred considerable comment among Hollywood’s existing suppliers. Starz hopes to make as many as 12 movies a year, with a lid of about $30 million per pic. It will not follow a Lionsgate model, however: Plans call for a mix of comedy and prestige films, as well as a few genre pieces, with filmmakers accorded a high degree of creative autonomy as well as generous participations. A core staff of some 15 execs will rely heavily on independent production units to supply the product.

Distribution would be handled by a newly organized entity that Starz hopes will be in operation by the first quarter of next year. Financing details are being hammered out.

New effort marks the first time a Malone entity has involved itself in film production and distribution. Liberty will basically become a content provider involved in every aspect of the production-to-distribution spectrum.

“We’re creating a company that will do everything from soup to nuts,” said Bob Clasen, whose title grows with the new expansion from prexy-CEO of the Starz Entertainment Group to chairman-CEO of Starz, the umbrella company overseeing two operating units: Starz Entertainment and Starz Media.

Bill Myers, who rises from exec VP and chief financial officer to president and chief operating officer of Starz Entertainment, said Malone “actively participated” in the strategic planning of the expanded operation.

Unlike its competitors HBO and Showtime, which commission lots of original series, Starz is dependent on theatrical movies, some of which have begun to lose their luster by the time they reach Starz after the DVD release, pay-per-view and even downloads from the Internet.

“We don’t own product, and we don’t own a library,” said Clasen., who plans to do everything he can to remedy that deficiency.

That’s one reason why Clasen is in negotiations with McGurk, the veteran studio head whose previous jobs have included vice chairman and chief operating officer of MGM, president and chief operating officer of Universal Pictures and prexy of Walt Disney’s Motion Picture Group. McGurk would run the separate operation within Starz Media.

In addition to the McGurk-generated movies, Starz Media will gather up IDT, Starz Prods., Starz Home Entertainment, DVD distrib Anchor Bay Entertainment and two animation divisions, Manga Entertainment and Film Roman.

Also in the mix at Starz Media is an existing worldwide-distribution setup that markets and sells movies and series outside the U.S. Neil Braun continues as president of distribution and marketing of the setup, reporting to Clasen.

John Hyde adds the title of prexy- chief operating officer of Starz Media to his post as prexy of Starz Home Entertainment. Hyde also reports to Clasen, as does Myers.

Not all of McGurk’s movies would have to go to theaters in the U.S., Clasen said. Depending on how the finished product comes out, he continued, “it could go direct to video, or to television first, or even to the Internet.”

All the inhouse movies, Clasen said, would end up on Starz, its premium sibling Encore and/or one of their 14 other multiplex channels.

With more production rolling out of Starz, the company is actually supplying exclusive product to its pay TV competitors. Twentieth Century Fox will distribute four full-length animated features from IDT Entertainment under a deal concluded before John Malone’s Liberty Media bought IDT. Twentieth has an output deal with HBO, which gets first refusal on these animated theatricals (although a clause in its contract allows HBO to pass on animated product).

And IDT filmed the 13-episode “Masters of Horror” anthology series for Showtime, which has ordered a second 12-episode season of the hourlong terror movies directed by such veterans as John Carpenter, John Landis and Peter Medak.

But Clasen said plenty of product will get funneled to Starz and its various networks. The pics to be bought and produced by McGurk will be a welcome addition, particularly since Disney, one of Starz’s two biggest studio suppliers (the other is Columbia Pictures), has announced a cutback in theatrical production, and Revolution Studios, another exclusive source of movies to Starz, will shut down production.

A 13 half-hour “Eloise” series will kick off on Starz’s Kids & Family, marking the first time a series has ever premiered on the multiplex. And Manga Entertainment’s animated “Karas” will run on Encore’s Action multiplex channel.

Clasen said he’s counting on greater agility in order to make inroads against the majors. “When it comes to greenlighting a project,” he said, “we’ll have three people in the room, not 30.”

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