Studios ax producers’ pacts

Majors show a passion for slashing deals

To see a complete list of all studio pacts, choose “Facts on Pacts” from the Chart menu at the top of the page.

If you’re a studio producer and want to keep your gig, your energy level better be frenetic and your output significant — or you’ll be sent packing.

That’s the message producers are getting from studios as the majors continue to slash on the lot production deals while redefining the very nature of the pacts they choose to make.

And that message has sent producers studio-hopping or hustling for financiers with deep pockets or running off to any number of dot-coms.

Variety’s fourth annual compilation shows two more significant trends: Miramax and New Line, and smaller companies such as USA Films and production/sales shingles such as Intermedia and Initial Entertainment, are quietly increasing and redefining their producer alliances. Meanwhile, the studios — once known for lavish “vanity” deals — are signing leaner deals with the producers they do keep.

Add to this the emergence of a new breed of power-producer who has already secured foreign equity and brings strong ties to talent, and the landscape is more complex than ever.

But studio reps insist that their producer base is strong and that they are only nixing pacts they find to be out of sync aesthetically or non-productive.

Even for producers whose deals remain intact, it’s not the best of times. Compared to years past when top producers’ discretionary funds soared as high as $1 million-$2 million and overhead reached $3 million-$4 million, the new studio deal less often grants discretionary funds to producers and keeps overhead at a minimum.

Sources say that several years ago Warner Bros.-based producer Jerry Weintraub had a discretionary fund in excess of $1 million a year, overhead (office space, expenses) of $3.5 million and a staff of 10-11. From 1996-1999, he produced “The Avengers,” “Soldier” and “Vegas Vacation.” Clearly, that output and quality wasn’t enough. While Weintraub does have “Oceans 11” starring Julia Roberts, George Clooney and Brad Pitt on deck, and while Warners has extended his deal, the terms are sharply different. Sources say his overhead has been reduced to under $2 million and his staff sliced to five.

At Miramax and New Line, practically no one gets discretionary funds and only a select few receive money toward overhead. In fact, sources at Miramax say the top brass evaluates the needs of each individual with whom the company strikes a deal and that pacts range from first-look deals with overhead to informal verbal agreements with a director or producer.

Productivity is key

“It’s about finding people who want to be in business with you, who can add value to your company,” says Peter Schneider, who took over the chairmanship of the Walt Disney Studios in January after Joe Roth ankled.

“I want people who are going to make movies here, who are passionate about making movies for us,” says Schneider. “Everywhere you can find good savings in overhead, it goes straight to putting movies on the screen. That’s where the real value is.”

Numbers tell part of the story. Continuing the trend of the past three years, Variety has found studio deals down a total of 28, with considerable change at each company.

What follows, however, needs qualification. The survey focuses on producing deals and does not include first-look pacts with actors and directors who don’t produce.

Here is a breakdown studio-by-studio:

Disney

While Disney was one of the largest deal-slashers under Roth, who lead a studio-wide cost cutting initiative, this year the Mouse House has roughly the same number of deals as it had last year.

The numbers, though, are deceptive. Some major deals are gone and the lesser, leaner deals are new. David Hoberman’s Mandeville Pictures, which dwelled in swank offices on the third floor of the old animation building on the Disney lot, has moved to West Los Angeles and morphed into Hyde Park Prods., a company with a first-look deal with MGM, a second-look pact with Disney, a new producing partner (Ashok Amritraj) and enough equity partners to make movies outside of both studios.

“Sixth Sense” producer Barry Mendel has hopped to Universal, though he is still on board as a producer on M. Night Shyamalan’s follow-up project at Disney, “Unbreakable.”

Producers Charles Shyer and Nancy Meyers have dissolved their company, with Shyer directing Warner Bros.-based Alcon Entertainment’s “The Affair of the Necklace” starring Hilary Swank, and Meyers helming “What Women Want,” starring Mel Gibson and Helen Hunt, at Paramount.

Nicolas Cage’s Saturn Films deal has expired, though the company is in advanced talks to hang a shingle elsewhere. Paul Schiff Prods. has folded, with Schiff joining Rick Hess’ Propaganda as prexy. Hunt Lowry is also leaving Disney, having taken the reins of Gaylord Films, a division of the well-capitalized Gaylord Entertainment. Julia Roberts’ Shoelace Prods. has followed Roth to his Revolution Studios.

Meanwhile, the Mouse House has solidified mostly smaller deals with James Mangold, Eric Roth, Charles Hirschhorn, Mike Marcus, Wes Anderson and Owen Wilson, Mike Mitchell and Rob Schneider.

DreamWorks

Sources close to DreamWorks say the company is only looking to ink deals with producers who have projects ready to start. Such a mandate explains why Mimi Leder’s Yak Yak Pictures’ deal was not renewed (she now has a first-look with Warner Bros.-based John Wells Prods.) and why other pacts have dissolved.

Coming off the success of “American Beauty,” the studio has elected to keep some of the films’ creative team in the fold: Producers Bruce Cohen and Dan Jinks and director Sam Mendes now call DreamWorks home.

Also new at DreamWorks: Woody Allen, whose past films were distributed by Sony Pictures Classics, Fine Line and Orion but who never had a studio deal before. Under the new three-year, three-pic pact, Allen comes with $100 million in equity via German vid and licensing giant VCL.

Fox

Partly because of the studio’s lackluster performance over the past year, Fox has signed virtually no new deals, although studio execs say they are modestly expanding deals that produce pics, such as the one with John Davis’ Davis Entertainment. With chairman and CEO Bill Mechanic’s sudden departure announced June 22, one can anticipate continued restraint.

Among the largest pacts to migrate from Fox is Chris Columbus’ 1492 Pictures, which is expected to dock at Warners where Columbus is shooting “Harry Potter.” Also gone are Sigourney Weaver, Denzel Washington, Mike Newell and Art Linson. Arnold and Anne Kopelson, who recently struck a financing pact with Munich-based Intertainment, are also expected to negotiate an exit from their expensive deal later this year.

“The key criteria for us is productivity,” says a Fox source.

Though Fox continues to value an equity partnership with Arnon Milchan’s New Regency Prods., the studio has resisted forming similar pacts, preferring to retain all international rights to its films.

MGM

Picking up Terence Chang and John Woo’s Lion Rock Prods. as well as Seth Jaret’s Jaret Entertainment and Hyde Park Entertainment, MGM appears to be expanding in the pact department.

MGM’s classic division, United Artists, and prolific producer Christine Vachon’s Killer Films (the company behind the Fox Searchlight release “Boys Don’t Cry”) have parted ways. Killer has found funding via the deep pockets of both John Wells and Paul Allen’s Clear Blue Sky Prods.

UA is expanding its tentacles, inking deals with Francis Ford Coppola’s American Zoetrope, Gotham-based Greenstreet Prods., and Michael Stipe’s Self Timer.

Miramax/Dimension

Though Miramax’s deal with London-based HAL Films has dissolved, the company is one of the most pact-friendly, signing numerous deals with actors, directors, writers and producers that are less formal than the majors would make.

One of Miramax’s most productive pacts continues to be with Richard Gladstein, whose FilmColony shingle has produced such films as “The Cider House Rules” and “She’s All That.”

Paramount

Like Fox, Paramount this year has opted not to sign any new producer pacts. Instead, the studio has ended deals with the likes of Cort/Madden, Mace Neufeld and Gale Anne Hurd.

Neufeld has taken his shop to Sony; Hurd’s new Valhalla shingle has found funding from German conglom Kinowelt.

Continuing to prove productive at Par is Tom Cruise and Paula Wagner’s C/W Prods. and Jodie Foster’s Egg Pictures, as well as equity partner Mandalay Entertainment.

Universal

Universal has ended its relationship with Good Machine, Mike Lobell and Jim Sheridan’s Hell’s Kitchen, as well as Penny Marshall’s Parkway Prods., but the company has attracted such producers as Barry Mendel and Casey Silver and retained one of its key suppliers, Jersey Films.

However, with Vivendi’s pending acquisition of Universal, the studio’s commitment to on-lot producers remains in question.

Sony

After a financially disappointing several months, Sony is retrenching, increasing its emphasis on acquisitions and the bottom line with the installation of Peter Schlessel as prexy of production.

Sony also signed a domestic distribution deal with Joe Roth’s Revolution Studios last month, with an eye toward alleviating the crush of movie production at Col.

Sony Pictures Entertainment chairman John Calley told Variety that the studio is not looking to expand in the pact department, and an approximate net loss of four production deals reflects that. But with Roth, he says, it was different: the ex-Disney chairman attracts talent and brings funding.

Unlike other pacts at Sony and elsewhere, Roth’s movies will not have to wait for the studio’s greenlight. The production shingle will act autonomously.

Over the past year, Sony ended deals with John Woo and Terence Chang’s Lion Rock Prods., which landed at MGM. Sony similarly discharged Lisa Henson and Janet Yang’s Manifest Films. In their stead, the studio offered housing to longtime Par action producer Mace Neufeld, while inking a deal with the formerly U-based helmer Penny Marshall.

Warner Bros.

Warner Bros. is still in the process of scaling back on deals; sources say many are reaching term. Of those that will be renewed, most will be done so at greatly reduced overhead.

Negotiations are ongoing between the studio and Paula Weinstein and Barry Levinson’s Baltimore/Spring Creek Prods. — just days before the opening of their $140 million “The Perfect Storm.”

If Weinstein and Levinson do stay on the lot, sources say it’s likely that the producers will have to bring in their own financing — a scenario that Warners sources expect will become increasingly common in the year ahead.

Among the largest pacts to exit WB this year are Bobby Newmeyer and Jeff Silver’s Outlaw Prods., which has produced such films as “Three to Tango” and “Ready to Rumble”; and Joel Schumacher, who helmed such films as “Batman and Robin” but who didn’t produce anything for Warners outside of serving as exec producer on Outlaw’s “Gossip.”

Madonna’s Madguy Films has also left, though sources say a new deal somewhere else is imminent.

Claude Brodesser, Paul Duke, Dana Harris, Dade Hayes and Dave McNary contributed to this report.

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