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Milchan builds bridges and ponders power

WHAT MAKES ARNON RUN?

That question is being asked by a growing number of major players in the entertainment business around the world as they observe the ever-expanding arc of Arnon Milchan’s activities.

More and more, the ubiquitous Milchan is turning up in the middle of intriguing deals and dialogues in the U.S. and abroad. Milchan already has made a considerable mark in the film business: His company, New Regency, has been responsible for 38 movies and plans a slate of eight more by the end of 1995. Some 15 are slated for release in 1996. Recent Milchan hits have included “Boys on the Side,””The Client” and “Natural Born Killers.”

The consensus among Milchan watchers, however, is that movies are the start, not the culmination, of his private scenario.

So where’s he headed?

One person not to ask is Arnon Milchan himself. A jaunty, gregarious man who enjoys the good life, Milchan has always been uncharacteristically silent when confronted by the press. Ask him a direct question and he becomes a study in circumlocution.

But people who know the Israeli-born Milchan believe they detect a clear direction to his maneuvers. Indeed, they feel Milchan’s blueprint is as imaginative as it is ambitious.

“Arnon sees himself as a bridge between the pop cultures of Europe and Hollywood,” said one filmmaker who has worked for him. “He is one of the very few individuals who understands both Hollywood power and Europe’s paranoia about that power.”

It’s believed Milchan will increasingly be turning up in exotic new ventures in film, exhibition, music and TV designed to mobilize the creative and financial resources of Hollywood and foreign partners. He will also be striking alliances with important new players; Milchan’s recent entente with Australia’s Kerry Packer is one example. Packer originally acquired a 25% stake in Milchan’s company from the German banker Bodo Scriba. He later bought an additional 4 1/2% for the equivalent of $ 150 million in cash and new credit lines. Another global partner of similar clout is expected to be revealed shortly. The Packer deal in effect placed a valuation on Milchan’s company of between $ 800 million and $ 1 billion.

“Milchan plays the role of global middle man — the man who always seems able to plug the right elements into a situation,” says one dealmaker.

Such was his role in the new European Music Box, which will go on TV in France this June. A venture uniting pubcaster France Television (channels 2 and 3), Time Warner, Sony, Hachette (whose stations will broadcast the show simultaneously on the radio) and Milchan’s New Regency, the latenight show will mark asharp departure in Euro programming. It will introduce a mix of videos (60 % French artists and 40% foreign) plus news, reviews and other material. If this sort of latenight programming aimed at younger demos works in France, Milchan wants toexpand it to Italy and other markets around the world.

Similarly, Milchan’s company is allied with Warners, France TV and RAI on an English-language miniseries based on the life of Lafayette, a historic European who, of course, made his mark in the U.S.

While many of Milchan’s movies have been down-the-middle Hollywood blockbusters such as “Free Willy” and “Pretty Woman,” he’s also maintained a steady flow of fare with a Euro tilt. “Sommersby,” which grossed $ 150 million worldwide, was based on the French movie “The Return of Martin Guerre.” Several upcoming films from New Regency, while aimed at the international market, will be shot in Norway, Venice and other Euro locales.

New Regency has also scored points with Euro filmmakers by backing director-driven projects such as “Brazil” and “JFK.” (Milchan and Oliver Stone, who directed “JFK,” had a recent falling out over the budget of Stone’s next project, “Nixon,” starring Anthony Hopkins, but a Tom Cruise movie is still on the agenda.)

IN PURSUING HIS GLOBAL scenario, Milchan has been encouraged by global-minded Warners, which is New Regency’s key financing and distribution partner. Most of Milchan’s early films were co-financed with Warners, but his company presently supplies all the funding for most of the current slate, with Warners distributing.

Some Milchan-watchers wonder, however, whether this relationship will survive once New Regency has delivered the 20 films required to fulfill the deal. Sources speculate that Milchan has been re-examining his options lately. “I think Arnon wants to find a true corporate partner,” one insider speculates. Such a partner would take a substantial position in his company and support its expanded push into music, TV and other activities.

These sources suggest that Time Warner, with its various highly competitive if not warring factions, may not provide a sufficiently hospitable environment in the long term. Some guess that Milchan may ultimately forge a consortium to take control of MGM/UA from its present unhappy proprietor, Credit Lyonnais.

MEANWHILE, MILCHAN IS UNDER no pressure to make any quick moves. Having made a considerable fortune in several businesses, Milchan, technically a resident of both his native Israel and of Monte Carlo, actually divides his time between a handsomely appointed Malibu beach house and a lavish home in Monfort les Maury, a village near Versailles, where his next-door neighbor is Paris mayor Jacques Chirac.

A spirited tennis player and avid partygoer, Milchan gives some associates the impression of being a gadfly, when, in reality, he is renowned as a stickler to detail and a fierce negotiator.

A clue to his expanded ambitions lies in two recent hires: Olivier Granier, a former president of Le Studio Canal Plus’ Los Angeles operation, who now heads Milchan’s international activities based in London; and David Matalon, former president of TriStar, who has just become chairman of New Regency in Hollywood. Friends also note that Michael Ovitz has been playing a growing role in Milchan’s “think sessions.”

Wherever Arnon is running, he clearly plans to get there fast.

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