Studio looks to take a bigger bite with 13-15 releases per year
A great deal of movie excitement was stirred over the weekend by odd characters named Katniss, Peeta and Prim, all of whom live in a nation called Panem and are denizens of the world of “The Hunger Games.”
If “The Hunger Games” is the megahit it seems to be, its release could trigger an event in Hollywood that hasn’t happened in several generations: the birth of a new major studio. All that depends on the definition of “major.”
Based on a sci-fi trilogy that has sold more than 26 million books, “The Hunger Games” represents the first release of newly merged Lionsgate and Summit, a combined entity whose domestic gross may top $1 billion this year. That would be a record for an indie. Top execs of the company resist the word “major” because they don’t covet the overhead suggested by that term.
The last entity that launched itself intending to become a full-fledged studio was DreamWorks (Steven Spielberg dreamed of designing modern stages) but that never happened. Relativity’s Ryan Kavenaugh has similar aspirations, but survival seems a smarter aim.
Whether major or not, the new entity regards itself as a studio with plans to release 14-15 movies a year under separate Summit and Lionsgate labels. Its structure will deviate from that of the majors in that it will continue to rely on licensing its films overseas (retaining the copyright while hedging its bets). Further there will be no housekeeping deals, no stages, and a development program that is far more limited than those of the majors.
Skeptics note that both Summit and Lionsgate have had their ups and downs in finding viable product under these rigorous rules. Even Summit’s Oscar-winning film, “The Hurt Locker,” failed to register significantly on the box office scale. On the other hand, a couple of successful franchise films can compensate for many mistakes, and both companies have avoided financial disasters on the “John Carter” level.
In acquiring Summit for some $412.5 million in cash and stock (much of it Summit’s cash), Lionsgate’s empire spans the two hottest movie franchises around, a viable TV division (with shows that include “Mad Men” and “Weeds”), a multiplatform pay TV channel (Epix, with partners Viacom and MGM) and a formidable library (the Lionsgate library generates a $130 million cash flow).
What it does not have is a physical studio or a foreign distribution company (Summit’s co-leader, Patrick Wachsberger, is a second-generation expert in foreign sales). Having already shed some 80 employees post-acquisition, the company seems intent on trimming its potential bureaucratic bulge.
Its flashiest asset, to be sure, is its franchises. The first four “Twilight” films have grossed more than $2.5 billion worldwide and the latest film broke the $700 million mark (the fifth iteration opens Nov. 16).
Lionsgate, which has had a bouncy ride on the features side, hopes for similar numbers with its “Hunger Games” franchise based on record advances and a strong weekend opening. The company acquired the property in 2009 when a mere 150,000 books were in circulation. The first sequel opens Nov. 22, 2013.
Led by Jon Feltheimer and Michael Burns, Lionsgate initiated talks with Summit a couple of years ago, but the threatened takeover by Carl Icahn, the famous corporate raider, stalled the plan. Lionsgate devoured a series of smaller entities such as Trimark, Artisan, Mandate and the TV Guide Channel in previous years.
Summit’s two leaders, Wachsberger and Rob Friedman, certainly have the combat experience to lead the combined film program. While Wachsberger has operated in the indie sector, Friedman, coming from a marketing background, logged years at Warner Bros. and Paramount. The two executives, both well respected with a wide circle of friends throughout the industry, find themselves in an enviable position with the town’s key creative players. They have the resources and the ability to make quick decisions.
Will they end up creating a new major?
With some of the majors cutting back production, the opportunity would seem propitious. Perhaps it’s no accident that the next Hunger Games sequel is titled “Catching Fire.”