Studio's team gambles big on eclectic slate

Talk to most Hollywood production chiefs these days and you tend to hear a litany of bearish concerns.

Some are cutting back on slates because of the glut of movies. Some are delaying start dates because of fears of a SAG strike. Others are shaving producer deals or star gross participations.

Against this climate, Universal is a bastion of optimism.

While the rest of the industry fears doom and gloom, U is expanding its slate, widening its reach into international markets, and even embarking on risky, untested event pictures. As GE mandates significant cuts at U’s sister TV divisions, the film studio’s chairman Marc Shmuger and co-chairman David Linde, with just over 19 months on the job, are embarking on an ambitious and diverse slate of projects.

In fact, even as the rest of Hollywood seems to wrestle with its corporatization, they publicly profess to be just fine with it.

“I kind of like being owned by GE,” Linde says. “Maybe there are pressures on you as a manager that other studios don’t experience, but it also gives you tremendous security for as long as they own the company. They stick to their word, and you don’t have to worry about whether you’re actually going to have the money for your budget.”

Over the next year or so, the full extent of Shmuger and Linde’s slate will be put to the test. The high-profile projects include the George Clooney-directed comedy “Leatherheads,” Sacha Baron Cohen’s “Bruno” (his “Borat” followup), along with movie adaptations of the musical “Mamma Mia!” and the play “Frost/Nixon.” And despite the misfire that was “Miami Vice,” U has enlisted Michael Mann for “Public Enemies,” a period actioner with Johnny Depp as John Dillinger.

The biggest risks are in their efforts at landing new franchises, something that, save for the “Bourne” series, has eluded U for quite some time. “Evan Almighty” was but the latest in a series of disappointments that also include the previous regime’s “Van Helsing” and “King Kong.”

On tap is a fourth “Bourne” movie, but their slate is full of efforts to either launch new franchises or resurrect old ones. The latter group include revivals of “The Mummy,” “Hellboy” and “The Incredible Hulk,” as well as another “The Fast and the Furious.”

U also launched a lucrative venture last week with Hasbro to make films out of its toy and board game properties. And the studio has a deal with animation veteran Chris Meledandri.

GE “wanted us to operate on as broad a platform as possible, with the obvious advantage that it makes you less susceptible to your misses,” Linde says. “They increased our financial support in the last year to expand production worldwide so we are more consistently releasing movies that we generate and own ourselves, and to enable us to do a deal with Chris Meledandri that put us back in the family business, which is vital for any studio.

“As a result,” Linde adds, “it’s a different company than when we got the job 19 months ago.”

Their predecessor, Stacey Snider, although successful in her own right, left in what could be best described as frustration at trying to operate in GE’s corporate environment. The head of NBC Universal at the time, Bob Wright, was never a huge fan of the film division, a sentiment perhaps reflected in the fact that U let a proposed purchase of DreamWorks slip away to Paramount. (Wright’s successor, Jeff Zucker, is much more keen on the feature business.)

So when Universal Studios chairman Ron Meyer appointed Shmuger and Linde to their posts, what was most noticeable was that neither had much actual production experience.

Shmuger was the well-respected marketing chief of Universal, and Linde was partnered with James Schamus in Focus Features, with a specialty in international film sales and indie distribution. Many signs pointed to the team having to endure a long and intense learning curve in Hollywood’s creative community.

But that was perhaps the least of their challenges.

As Linde points out, the company was falling behind in market share. In 2006, U didn’t even have a release between August and Christmas Day.

Last year, boosted by the runaway success of “The Bourne Ultimatum” and the comedy “Knocked Up,” the studio posted record profits, Linde and Shmuger say, even though it didn’t make enough movies to place any better than fifth in total market share.

Their plans are to increase their output from 14-16 releases to 18-20 releases this year.

“If you are going to create consistent revenue out of the film business, you have to release movies consistently, and you have to own them everywhere in the world,” he says. “You take more risk, but you create more opportunity.”

The cornerstone of their strategy lies in foreign expansion. Because of the breakup of overseas distribution operation United Intl. Pictures, they’ve also been given the mandate of building up the studio’s international operations, with an eye toward generating new sources of revenue in overseas markets.

Spearheaded by international prexy David Kosse and foreign production chief Christian Grass, the operation has signed filmmakers from Brazil, Mexico, Russia and Asia to make two films each year designed to play in their home countries. Counting the international production, U’s slate and those of genre label Rogue and specialty label Focus, by 2010, the studio could be unleashing as many as 35 pictures worldwide.

“We saw the opportunity for growth internationally; that’s where we needed to take control of our destiny,” Meyer explains. “Owning rights to our movies, distributing them ourselves — that’s where we can make the biggest impact.”

Perhaps most indicative of the new bent toward international possibilities is the $175 million the studio is spending on “The Mummy: Tomb of the Dragon Emperor.” The last “Mummy” film, released in 2001, grossed $427 million worldwide, but it seemed to run out of creative juice. (The new production lacks director Stephen Sommers and one of its stars, Rachel Weisz.)

The studio is using the project to exploit international markets. Because of heavy Chinese participation, it’s considered a Chinese co-production. That gives the studio access to more valuable screens and a greater return than a U.S. production would normally get.

And U hopes for a big payoff in the form of cross-promotion. The movie will be released on Aug. 1, in advance of the Summer Olympics in Beijing — which are, not coincidentally, being broadcast on NBC.

“Alongside ‘Jurassic Park,’ (‘Mummy’) was the most profitable franchise we had in the vaults of Universal, but we needed to reinvigorate it,” Shmuger says. “We did that with the Chinese setting, the Terra Cotta warriors, Jet Li and this great Chinese cast.”

Shmuger and Linde have had a rougher time in navigating the complex world of Hollywood talent relationships. They have relied to an extent on their production chief, Donna Langley, who admits that she has gotten so busy that it can take her six weeks to read a script that is not top priority.

“Marc is a big-brained marketing guy, David has a nose for the marketable idea, and they are both business-savvy, which puts more of a business spin on our conversations about which films to green light,” Langley says. “For guys who didn’t grow up in production, they have good creative instincts. … They are figuring things out, in being more mindful of actors, big directors and producers, and it’s a different paradigm for people who were used to Stacey’s bedside manner.”

Imagine’s Brian Grazer says that the team impressed him in its enthusiasm in resurrecting “American Gangster,” a project that fell apart before it was produced last year, as well as the execs’ aggressive pursuit of the rights to “Frost/Nixon.”

“They’ve been extremely supportive of filmmakers and artists, and they don’t prognosticate or try to bring science to an art form,” Grazer says. “When every studio wanted ‘Frost/Nixon,’ they flew to London to see the play, and they went to New York and were the most aggressive in getting it.”

More recently, Shmuger and Linde landed Paul Greengrass and Matt Damon for a fourth “Bourne” movie, even though the director and star seemed ready to wrap it up after three pics. And they landed Sam Raimi to return to horror with “Drag Me to Hell,” starring Ellen Page.

Their crash course in talent relations came last year in their efforts to get “State of Play” into production. Weeks before it was to begin shooting, Brad Pitt left the project. The studio threatened to sue, putting them at odds with the actor and his reps at CAA, who maintain that he never signed off on the script. But the parties cooled down after U landed Russell Crowe for Pitt’s role, and there are now settlement talks that could even put Pitt in a future U movie.

Eric Fellner, who is making the movie via his and partner Tim Bevan’s Working Title label, says, “It was very tense, and the film would have collapsed if they weren’t 100% determined to get it made, and do whatever it took to make it stay together.”

Adds Bevan, “They were brilliant under fire.”

U also was caught off-guard after they aggressively courted Guillermo Del Toro, the filmmaker behind “Pan’s Labyrinth” and “Hellboy.” The studio gave him a first-look deal, picked up a sequel to “Hellboy” with a budget of more than $80 million, and even bought the rights to his dream project, the H.P. Lovecraft epic, “At the Mountains of Madness.”

But U brass was stunned to suddenly see Del Toro emerge as the likely director of the next two “Hobbit” movies for New Line and MGM. That would lock him down for four straight years in New Zealand.

Langley acknowledges, “We’re in discussions with how to rectify that with Guillermo.”

A walk around the U lot gives a telling sign of where things stand. Steven Spielberg is embarking on an expensive renovation of his oasis, the offices of Amblin/DreamWorks, just as U looks to land a deal with DreamWorks when the Paramount pact expires. Nearby, however, the once-bustling offices of Ivan Reitman are empty save for those of “Evan Almighty” director Tom Shadyac, who will soon depart as well.

Shmuger, in fact, is candid in admitting that “Almighty,” put into production before they took their posts, was a misfire.

“We were coming out with something that at its essence had a different DNA than the first film, and that was a huge miscalculation on our part,” Shmuger says. “I think it works as a movie, but it needed to have been made at a more affordable price. Being tagged ‘the most expensive comedy ever’ was an albatross around our necks.”

Yet even as rumors swirl that GE wants to unload Universal to devoid itself of the risk of the studio business, Shmuger and Linde say they’ve yet to experience any fallout.

“These are fair people who are smart in business, and we’re blessed that Ron Meyer shoulders a lot of that burden, and effectively blocks and tackles for the entire team by taking many of those meetings himself,” Shmuger says.

“That makes it easier. But what we’re enduring is smart, rigorous business processes. It can be wearing, but only because it’s so exhaustive. But you can’t argue. It’s their money, their company, and we should be beholden to proving we’re running a business in the smartest way possible.”

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