Breaking news causes third-act rewrites

Sensing a ready-made narrative more provocative than any fictional spy thriller, Warner Bros. moved quickly to secure screen rights to “Fair Game,” ex-CIA agent Valerie Plame’s upcoming memoir.

It’s a delicious political thriller of secret government power, covert identity and White House manipulation that would make for a great movie.

But for the studio — and others that attempt to tackle such topical material — the path to release is strewn with landmines.

Besides the inevitable controversy that will surround such a project, Plame’s own story may never see the light of day. Citing national security, the CIA may not let Plame publish the book.

As studios, producers and agents set their sights on projects rooted in recent, real-life events, they do so at their own peril. Lured by the cachet that comes with non-fiction, studios are willing to take the risks that are part of the deal.

True stories and the subjects involved in them often take unpredictable turns, and sometimes blow up after the studios have invested millions of dollars in script drafts and rights fees.

“Since Sept. 12, 2001, there has been an insatiable hunger to tell true stories,” said Peter Landesman, a New York Times Magazine correspondent who has written several fact-based scripts, including a Universal drama about Watergate whistleblower Mark Felt. “What is changing now is the gestation period. There are more real-time stories being told, and the pitfall is that truths might not be revealed until much later. When you plant a flag in something you believe to be true, the danger is that time might pass and prove you wrong. You can be left with egg on your face.”

WB and producers Akiva Goldsman and Janet and Jerry Zucker are moving forward on the Plame project anyway, having secured her life rights and that of her husband, former ambassador Joseph Wilson. Jez and John Butterworth are penning a script that will include the Plame memoir only if the CIA signs off on it.

It’s only one example of the complications that producers face when they pursue such true stories and get caught up in events beyond their control.

Writer-director Nick Cassavetes was wrapping his drama “Alpha Dog,” about the kidnap and murder of a San Fernando Valley teen over his brother’s unpaid drug debt, when the suspect, Jesse James Hollywood, was apprehended in Brazil after years on the lam. The debut of the movie was held up as defense attorneys argued that its release would taint the criminal trial. When it finally opened, “Alpha Dog” grossed just $15 million at the domestic box office.

There are ample other examples where true stories took surreal turns.

  • Director Mark Romanek was scouting locations for WB’s adaptation of “A Million Little Pieces” when author James Frey went from literary darling to pariah after admitting that parts of his book were fictionalized. The pic stalled when Frey was vilified on “Oprah,” but now Warners and producers Plan B and John Wells are still trying to figure out if it can be salvaged. The latest: Tod Williams is attempting a new draft that will include the Frey controversy as a plot point.

  • WB and producer Paula Weinstein won a 1995 auction for the rights to Tommy Dades, the former Gotham detective who helped win a conviction against ex-cops Louis Eppolito and Stephen Caracappa for carrying out eight murders for the Mafia. Then the cops’ convictions were thrown out on a technicality. Dades then got in a confrontation in Staten Island (in what press reports characterized as an act of self-defense) and one of the participants died from a ruptured spleen. WB let the rights lapse. Weinstein still believes in both Dades and the drama and has taken the project to 2929, attaching John Hillcoat to direct.

  • DreamWorks tapped director Kimberly Peirce and screenwriter David Benioff for a drama about Chris Paciello, a fugitive who hid in plain sight as a nightclub co-owner in South Beach. After Paciello was accused of being part of

a crew that committed murder, DreamWorks found itself at risk of being a financial

accomplice — Paciello’s rights were part of the deal. The package collapsed.

  • Almost a decade ago, Brad Pitt was attached to a project about Michael Laudor, a schizophrenic law student who became an inspiration when he graduated. Laudor signed a book and movie deal worth $2.1 million, and Chris Gerolmo was onboard to direct. Then, the project took a tragic turn when Laudor lapsed into a schizophrenic state and fatally stabbed his pregnant fiancee. The movie was scrapped.

“The trick with nonfiction is, sometimes the damn truth doesn’t work for the plot,” says writer Nick Pileggi, who adapted his fact-based books “Goodfellas” and “Casino” for the screen. “Both of those worked because each had a beginning, a middle and an end. I’ve spent a lot of time trying to get all the pieces to fit on other nonfiction projects, only to find there was no way to make it work.”

That hasn’t stopped fact-based films from becoming the hottest segment of the marketplace for material. Stars are lured to projects that come with the possibility of award-winning performances (On Feb. 25, Helen Mirren and Forest Whitaker became the latest in a long line of actors who’ve won Oscars for playing real people). Executives may earn points for shepherding remakes and sequels, but they also want their chance to come up with the next “Goodfellas” or “All the President’s Men.”

True-stories have driven some of the biggest deals of 2007. Hollywood studios scrambled early this year to dramatize the story of former KGB agent Alexander Litvinenko, just months after he was poisoned with a lethal dose of radiation. Both Sony and Warner Bros. are racing to do their own projects, but their efforts come with a major caveat: The story doesn’t yet have a third act.

British authorities are still trying to figure out who killed Litvinenko and whether Russian President Vladimir Putin had anything to do with it.

More recently, Warners paid seven-figures to develop Kurt Eichenwald’s Enron tome “Conspiracy of Fools” into a feature. It helped that Leonardo DiCaprio turned up personally with writer Sheldon Turner to pitch the project, and the studio made the deal in the room.

Within hours after the New York Times published an article on the Fugees, a misfit soccer team in Georgia comprised of refugees from global hotspots, four studios were engaged in a multimillion-dollar bidding battle. UTA agent Howie Sanders (who already repped the Times writer Warren St. John) jetted to Georgia to cordon off rights to the team coach before any other producer could sign her. By the time the dust settled, Universal paid $2 million against $3 million.

Long a seedbed for fact-based film deals, The Times finally got itself an agent at ICM. The Gray Lady will share in the profit from the Fugees deal, along with “The Fall of the Warrior King,” a Gulf War story being developed by Tom Cruise and Paula Wagner, and “Big Paydays for Humiliation,” about a bad college football team which is paid big bucks to be crushed in games against major colleges.

That latter project, however, is being developed as a Jack Black comedy and is likely to be fictionalized.

To avoid the many pitfalls, many studios are taking the fiction route, because it gives them the best of both worlds. They still get the narrative and all the ideas that come with it, but avoid the controversy that comes with venturing into such territory. It’s hard to imagine a movie like the 1977 “Julia” — based on a disputed Lillian Hellman tome — going into release these days without an uproar from Internet watchdogs.

Pileggi and producer Irwin Winkler are borrowing chunks of the Dades story for a fictional tale for Columbia. “A Cop Between” is about a boy from a mob family who becomes a police officer and then is seduced into compromising his integrity to save a friend from being murdered by the mafia.

“The only thing that makes non-fiction stuff great is when you have participants who will be honest and talk,” says Pileggi. “Those two cops (in the Dades story) were convicted, but they were not going to confess they murdered anybody, no matter how long you interview them.

“In ‘Goodfellas,’ we had Henry Hill, who opened up and gave up everything. He had the pressure of testifying under oath, and if they caught him in a lie, he was going to prison and he’d have been dead in 10 minutes. I was just lucky enough to be standing next to him, like a stenographer, as this guy talked about what it was like to want to be gangster. You could never have made that stuff up.”

Steve Gaghan fictionalized Robert Baer’s CIA memoir “See No Evil” as “Syriana.” “The Last King of Scotland” won acclaim, including an Oscar for Forest Whitaker, even though Whitaker’s co-star, James McAvoy, played a physician who was largely an invention.

But not so lucky was the Diane Arbus film “Fur.” Unlike other fictionalizations, the movie kept a real character’s name and put her in a made-up plot, a screenwriting device that created some confusion about the project. Picturehouse took pains to remind everyone of the film’s subtitle, “An Imaginary Portrait,” but critics pummeled “Fur” when Nicole Kidman’s Arbus character had a love affair with a fuzz-covered recluse played by Robert Downey Jr.

“With Arbus, we felt that Robert Downey’s character was a good metaphorical way to show the conflicts she had in going from this desperate housewife to an artist in the ’50s,” says the film’s producer, Laura Bickford. “She did have physical relationships with many of her subjects who were regarded as freaks. But she never slept with a hairy man, and it made some critics and audience members spitting mad.”

Creating even more of a firestorm was ABC’s “Path to 9/11,” which, despite being labeled as a dramatization, had members of the former Clinton administration calling for the network to pull the miniseries. ABC refused, but did make edits of some of its dramatic liberties before it aired.

Producer John Calley is venturing into similar territory with a feature version of Richard Clarke’s “Against All Enemies,” a highly critical look at the Bush administration’s lack of preparedness before 9/11.

Director Paul Haggis was poised to shoot “Against All Enemies” last year, but the pic got pushed for a number of reasons including an escalating budget and cast availability. Calley, however, is confident the movie will get made, and insists Sony isn’t squeamish about the subject matter.

In his experience, he says, studio toppers will rise to the occasion if the subject matter is worth it. Calley oversaw production at Warner Bros. when the studio made “All the President’s Men,” a bold move at the time.

“I remember (WB CEO) Ted Ashley being so nervous about ‘All the President’s Men’ that he had me call Steve Ross to get permission, because the parent company had all these regulated businesses and the subject of the movie was still sitting in the White House at the time,” Calley says. “I was spoiling for a fight, because I’d just had so much trouble getting ‘Deliverance’ made.

“When I told Steve about the project, he asked me if I loved it. When I said yes, he said good luck with it. I found myself filled with all this rage, with no place to go with it because the process had been so simple.”

Follow @Variety on Twitter for breaking news, reviews and more