COVER STORY: 'Hunger Games' established the bona fides of its star Jennifer Lawrence and producer Nina Jacobson, and turned mini-major Lionsgate into a full-fleged studio

When Jennifer Lawrence landed the role of Katniss Everdeen in the first “The Hunger Games” two years ago, neither she nor the film’s producer, Nina Jacobson, nor financial backer Lionsgate could imagine the magnitude of what would transpire for all of them.

The then-20-year-old actress had already landed on Hollywood’s radar for her brilliant turn as Ree Dolly, a determined Ozark teen searching for her missing father in 2010’s “Winter’s Bone.” But while the critically acclaimed movie earned Oscar nominations for the film and for Lawrence’s performance, it grossed a paltry $6.5 million at the domestic box office.

NEW ‘Catching Fire’ Cast Photos (EXCLUSIVE)

Jacobson had earned respect as a savvy film executive at Universal, DreamWorks and Disney, but she hadn’t yet set the world afire as an independent producer. And Lionsgate, despite having carved out a respectable niche as a scrappy independent studio, best known for its Tyler Perry and “Saw” film series, had seen its stock severely depressed due in large part to a bruising four-year corporate battle with its largest shareholder, Carl Icahn, for control of the company.

What a difference two years has made.

With the “The Hunger Games: Catching Fire” set to be released Nov. 22, and two more sequels in the works, Lawrence, Jacobson and Lionsgate have each seen their professional lives and business fortunes transformed following a first film that took in $691 million globally, including $408 million at the domestic B.O.

Lawrence, who can now command $10 million a movie, has become one of the biggest female stars in the world. Jacobson certainly doesn’t have to worry where her next paycheck is coming from. And Lionsgate has evolved from a scrappy minimajor to a full-fledged studio with a franchise that promises billions of dollars in future revenue from worldwide ticket sales.

“I always told Jon (CEO Jon Feltheimer), ‘What we need is a hit franchise,’ ” says vice chairman Michael Burns. “It only took 12 years.”

It’s actually been 13 years since Burns and Feltheimer took charge of Lionsgate, during which time the Santa Monica studio also has exponentially grown its TV business (it has 28 shows on the air, including Netflix’s “Orange Is the New Black,” AMC’s “Mad Men” and Showtime’s “Nurse Jackie”), and has seen its market cap increase from $80 million to nearly $4 billion.

Shares of Lionsgate stock have hit more than two dozen record high closes this year, including $37.46 on Sept. 10. The stock has been trading in the $36 range in recent weeks.

At a time when market volatility and seismic shifts in the business are impacting Hollywood’s economic underpinnings, Lionsgate has generated bullish sentiment among investors. With its 2012 acquisition of Summit Entertainment, home of the hit “Twilight” films, Lionsgate can lay claim to the two most successful young-adult movie series in modern motion picture history. (It will release a third YA film, “Ender’s Game,” on Nov. 1, hoping to add to its dominance in the genre.)

While there are no sure bets in Hollywood, “The Hunger Games” franchise is about as close as you can get. In a recent report by analyst Alan Gould of Evercore, “Catching Fire” was projected to gross $950 million in worldwide box office ($375 million domestically; $575 million internationally). Only 21 films have ever grossed that much, and only 17 have gone over $1 billion.

“We are projecting almost $400 million of profit from ‘Catching Fire,’ the Hunger Games sequel, about half in fiscal year 2014 vs. an estimated lifetime profit of $325 million from the original,” Gould said in his report. He is projecting similar economics for the following sequel, “The Hunger Games: Mockingjay — Part 1,” which hits theaters in November 2014, and slightly higher numbers for the final episode, “Mockingjay — Part 2,” dated for the following November.

A lot of the pressure to help deliver those returns rests on the 23-year-old shoulders of Lawrence, who isn’t rattled by much — though she admits it’s a bit odd to be continuing to play Katniss at the age of 17. “She is a very old 17, though,” the actress adds with a laugh in an interview from the Atlanta set of the two “Mockingjay” movies, which are being shot back-to-back.

Rewind to March 2011, when casting director Debra Zane, director Gary Ross and executive Rob Bissell were conducting auditions for more than 50 actresses for “The Hunger Games,” which was due to come out a year later. Zane was reading the scene in which Primrose Everdeen bids farewell to sister Katniss as she heads off to near-certain death at the 74th Hunger Games. Jacobson still remembers Lawrence’s performance.

SEE ALSO: Lionsgate’s Tim Palen Crafts Stylish Universe for ‘Hunger Games: Catching Fire’

“I teared up,” Jacobson recalls. “We had a lot of wonderful actresses at the audition, but it was game over at that point.”

Ross had similarly vivid memories of Lawrence’s reading. “I got choked up,” he says. “You only see that kind of talent once in a generation — that kind of intensity and emotional power. If you don’t find the right performer, you don’t have the movie. So I felt like, ‘Now I can make the movie.’ ”

In the upcoming “Catching Fire,” Katniss returns for another fight to the death after her Hunger Games victory has sparked a rebellion in the Districts of Panem.

“She really is the reluctant hero,” Lawrence says of her character. “She’s brave, but she’s also scared, and she knows that things may wind up being far worse.”

On the set, the actress is anything but reluctant about returning to the role, despite the pressure of portraying a screen personality that’s become iconic. “I love being here,” she allows. “It’s like going back to school where it’s a really fun school.”

Jacobson, whose producing endeavors also include the “Diary of a Wimpy Kid” films and the underperformer “One Day,” starring Anne Hathaway, appreciates the “just-folks” side of Lawrence — and Jacobson has worked with a lot of A-list stars during her years as a studio executive.

“She’s not a diva — she’s the anti-diva,” she says of Lawrence. “One of my favorite moments is where she has the wedding dress on for the interview (scene) in ‘Catching Fire.’ It’s a big cumbersome dress, and she fell down, so we played that over and over on the monitors. There’s such a lack of pretense with Jen; she’s more than happy to laugh at herself.”

Jacobson recalls that one of the keys in choosing Lawrence was finding an actress who had not yet broken through in the public’s mind.

“We knew that we had to cast someone who wasn’t already strongly identified with another role,” she notes. “ ‘Winter’s Bone’ was an incredible audition. We wanted someone who was nurturing, with a sort of feminine ferocity.”

Francis Lawrence, who succeeded Ross as director for the franchise starting with “Catching Fire,” is equally effusive about his leading lady.

“Jen inherited me as a director, and was great about it,” he recalls. “I called her when she was in Prague, and gave her my pitch, and I was stunned at how easy that part of it was. She’s the most consistent person on the set.”

SEE ALSO: Exclusive ‘Hunger Games: Catching Fire’ Cast Photos

Production on the “Mockingjay” films began Sept. 29, with a break to come in November so that the stars can properly promote “Catching Fire” — which will compete with other widely anticipated holiday sequels, such as December’s “The Hobbit: The Desolation of Smaug.”

Lionsgate will debut the “Mockingjay” films on the same November weekends in 2014 and 2015. Francis Lawrence admits it’s going to be a challenge to get three tentpole films out of the gate in three years.

“There’s something to be said for working with a gun to your head as opposed to working to develop something without a start date,” he muses. “It’s a different set of muscles. You think about it harder.”

Lionsgate’s toppers say they didn’t have to think very hard at all about paying Jacobson $1.25 million for the rights to “Hunger Games” just a few weeks after the producer optioned them from author Suzanne Collins. Feltheimer recalls the day the studio’s then-top movie executives excitedly pitched the project.

“We had our Wednesday staff meeting, and Alli Shearmur and Joe Drake were very passionate,” Feltheimer notes. “We decided a day later to buy it. At that point, the first book had sold about 180,000 copies.”

By the time Lawrence was cast in March 2011, “The Hunger Games” had become a publishing sensation. And by the time the film debuted in theaters, the second and third books — “Catching Fire” and “Mockingjay” — had become bestsellers, too, with a combined 36 million volumes in print, including movie tie-in books.

When production began in May 2011 in North Carolina, it triggered a series of major milestones both for Lionsgate and actress Lawrence.

(Producer Nina Jacobson and director Francis Lawrence. All photos by Williams + Hirakawa.)

In late August, Burns and Feltheimer had managed to end the war with the famously combative Icahn, cashing him out of his 33% stake at $7 a share, for $309 million. The activist shareholder essentially broke even on his four-year investment.

Four and a half months later, Lionsgate bought Summit Entertainment for $412 million, inheriting the final “Twilight” film, “Breaking Dawn — Part 2,” plus the Summit slate and management team led by Rob Friedman and Patrick Wachsberger. When the Summit deal closed, Lionsgate stock was trading at $8.60. Wall Street analysts began asserting the stock was undervalued, driving it to the $35 range over the next year and half.

“The Hunger Games,” which was by far the biggest-budget release ever for a Lionsgate film, at $88 million (as a sign of how far the distrib’s fortunes have changed, “Catching Fire” cost about $140 million) opened the following March with a stunning debut weekend of $152 million.

Within two weeks after the film’s release, Ross decided against directing the sequel, “Catching Fire,” citing what he viewed as too compressed a schedule to deliver the movie. A few weeks later, Lionsgate hired “Water for Elephants” director Lawrence — no relation to Jennifer — for the assignment.

SEE ALSO: PHOTOS: ‘Hunger Games: Catching Fire’: Marketing Campaign Heats Up

Burns and Feltheimer then decided to split Collins’ “Mockingjay” book into two movies, following the game plan Summit used for Stephenie Meyer’s “Twilight” books, and Warner Bros. used earlier with J.K. Rowling’s final “Harry Potter” novel.

By the time production began in September, Francis Lawrence had been signed to direct the final two “Hunger Game” films.

Meanwhile, Jennifer Lawrence won the actress Oscar this year for her role as the widowed and soulful Tiffany Maxwell in David O. Russell’s “Silver Linings Playbook” and will be seen over Christmas in Russell’s “American Hustle.” She has since signed on for another Lionsgate movie, “Burial Rights,” an adaptation of the bestseller set in 1829 Iceland, which Ross will direct. Lawrence will portray a woman condemned to death for killing her former boss.

The actress insists that she feels no differently about acting after winning an Oscar — “I’m so grateful” — and admits that being part of the “Hunger Games” world is still a bit daunting. “It’s weird dealing with this being as big as it is,” she concedes. “I’ve never been on another film where we actually talk about the fan base. It’s sort of like this Big Brother looking over us.”

David Bank of RCB Capital says that the key long-term question on Wall Street about Lionsgate is whether it can repeat its “Hunger Games” success in March, when it opens “Divergent,” another film set in a dystopian world, which also has franchise potential. Lionsgate cast another rising young female star — Shailene Woodley — as the plucky heroine in the now-wrapped movie, but hasn’t yet announced a production start on “Insurgent,” the second book in Veronica Roth’s trilogy. The concluding book, “Allegiant,” has just been published by HarperCollins imprint Katherine Tegen Books, and would also be split into two movies.

“What time will tell with ‘Divergent’ is how good Lionsgate is at identifying this kind of property,” notes Bank. “That’s the most important consideration — is there a real method to the madness?

(Photos by Williams + Hirakawa)

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