Deals in short supply despite lack of product

The studios are becoming lonely places these days.

That’s one conclusion to be drawn from several stories appearing in Variety this week. Consider the following:

  • The number of producer deals covering overhead and development at studios has declined from 302 in 1998 to 180 today.

  • Though production may soon gear up after a SAG-induced lull, the number of films being shot both by specialty units and their parent companies will be considerably lower than last year.

  • A greater proportion of films will be shot off the lot or abroad.

If you need further evidence of these trends, wander into a studio commissary and stare at the empty tables. Sony’s “Rita Hayworth” room (it’s the commissary with a fancy name) is a tomb these days, which is especially saddening to old-timers who remember the glory days of old MGM when real stars used to pack the place (that was before stars decided to hide from public or even studio scrutiny).

Given the shortfall of product, it’s reasonable to ask: Why are the studios running from filmmaker deals?

Cost-cutting obviously is a big part of it. Since producers and directors come in to pitch their individual projects one-by-one, why spend all that money on overhead and development funds?

But there’s another issue that’s still more provocative: The entrenched bureaucracies at the studios clearly feel they can provide the impetus to create and market their movies and don’t need all those expensive outsiders.

A confession: During my first year or so serving as a studio executive, I, too, felt I had all the answers. And, man, was I wrong. I soon realized how important those outside voices were — how much energy and experience they brought to the equation. Besides, it was delicious to find someone to blame when things went wrong.

Variety‘s annual Facts on Pacts chart reveals how scarce studio deals are becoming.

I can hear the number crunchers at the congloms boasting about the cost savings these cuts have engendered, but are these savings real?

Sure, a studio can sit back and cherry-pick fully packaged projects that are brought before it, but there are penalties along the way, both in terms of quality and expense. Sony bought the Roland Emmerich package “2012” but reportedly had to pay $1.5 million and 25% of the gross to wrest it away from competitors.

Yes, folks, there really was a moment, not that long ago, when inhouse producers or directors would develop projects at their studio bases, using their development funds, and production chiefs would greenlight them under pre-negotiated terms. That’s a rare phenomenon today.

Some seers believe we’re heading for a time when the studios will evolve into distribution and marketing machines and remove themselves entirely from developing and packaging their own projects. That may indeed become a viable business plan.

In the meantime, however, the studios occupy a sort of halfway house. They’re sure as hell not the “dream factories” envisaged by the David Selznicks and Jack Warners of old.

And, under present operating strategies, they’re getting kind of lonely.

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